Council / SIC considering council tax rise as next year’s budget looms
SHETLAND Island Council says it has to make changes to “ensure we live within our means” ahead of setting its 2025/26 budget next year.
It comes as the local authority consults the public on possible council tax rises to provide extra money towards the cost of services.
The consultation seeks views on freezing again, as well as increases of three per cent, five per cent and ten per cent.
Last year the SIC raised £10.8 million through council tax, but its band D rate is the lowest in Scotland and an increase is being considered.
Generally the council said it has already done some work to be more financially sustainable but “we still need to do more”.
In 2024/25 the SIC expects that it will have to take around £45 million from its reserves to balance its budgets.
The Scottish budget for 2025/26 will be presented in parliament on Wednesday and the SIC said while it does not know the settlement it will receive for the next financial year, it expects its funding gap will be about the same – or more.
In the consultation there is a warning that the council could reduce opening hours or the frequency of some activities.
It adds the SIC thinks it should stop delivering activity paid by external grants when that funding ceases.
The consultation says the SIC needs to look at how it manages its property, assets and infrastructure, potentially looking at selling or leasing.
With three quarters of the SIC’s budget spent on staff, as well as recruitment difficulties, the council has repeated its message that it needs change the way it delivers services.
“This could mean reviewing, restructuring and amalgamating existing services to make the most of available people, or redesigning a service completely to allow us to work in new ways,” the council said.
“It could also mean making better use of technology and new tools like AI to help us deliver and to free up staff to do other things.”
The consultation document said the SIC also wants to continue to review the charges it applies to services it provides.
“We also need to make the most of any new opportunities to generate income that we may find, for example, through income from our properties, making more of commercial opportunities from our quarries, looking at charges for commercial waste, or through additional council tax charges on second and holiday homes,” it added.
The online council tax survey is open until 5pm on 15 December.
SIC leader Emma Macdonald said: “Councils across Scotland are facing significant funding challenges right now.
“We know that our communities rely on the services that we provide, and we need to do all we can to manage our finances sustainably to safeguard our services for the future.
“To do this we know we need to make changes. We cannot keep trying deliver services with resources we don’t have.
“Shetland currently has the lowest level of council tax in Scotland, yet we know that it costs 20-65 per cent more to live here than it does in mainland Scotland.
“The council is not immune to the additional costs associated with heating, transport, goods and freight. It won’t fix all of our problems, but looking at these charges is just one way we can think about making these changes.
“We know any decisions we make are likely to impact services, and we’ll continue to speak directly to you all to understand these as the process gets underway.
“For now, I’d encourage everyone to take the time to complete the survey and let us know your views.”
A separate survey is also available for anyone who wishes to provide feedback on some specific elements of discretionary powers relating to council tax charges for second homes and long-term empty properties.
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