Press Release
Key decision day for Council spending
Crucial issues regarding Shetland Islands Council’s finances will be debated on 3rd October, following months of work aimed at balancing the books.
One report to be dealt with at the Executive Committee meeting deals with the Council’s reserves.
The report:
- discusses what each of the Council funds can be used for;
- sets out the challenging economic climate that the Council has to respond to;
- makes suggestions as to how much the Council should be taking from reserves.
In order to balance this year's accounts, the Council agreed to take £47m from reserves. The Council has a policy to keep the balance of reserves at £250m. According to political leader Josie Simpson:
"The challenging issues facing the Council mean it is likely that by March 2012, that level will be reduced to about £219m. It is important that the Council debates how much money we want to take from reserves each year and how much we want to hold for future generations. A Finance Services estimate, assuming the protection of the reserves, is that we should draw no more than £13m a year.What this would mean in practice would be a very difficult budget exercise for the next two years."
The other report the Committee will discuss next week is on the Strategic Budget Plan.
"This builds on the good work done last year," said Mr Simpson, "when the Council approved a three-year savings plan. We are making very good progress in banking the savings included in the plan. We want to keep that momentum going.Talking cash, what this means is that we will need to find about £26m over a two-year period. When we take off the savings that we have already achieved, we are looking at about £18m - £20m still to find.
The Strategic Budget Plan sets out how we are going to do that."
The first focus will be on internal efficiencies within the Council which do not impact on front line services.
"But that will not be enough," Mr Simpson said. "Council Members will need to take difficult decisions in the months to come.We are committed to exploring all these issues with the local community. We want to explain the financial choices which the Council has and to hear from folk what is important to them when the Council comes to discuss changes to services. We will be arranging public meetings at the end of October to discuss this."
Mr Simpson continued:
"The Council provides lots of services, for a whole range of reasons, from protecting some of the most vulnerable folk in the community to supporting economic development projects. Everybody will have their own ideas as to what needs to change. What I want to say at this stage is that we are committed to working with our staff and local communities to make the best choices we can to help Shetland remain a safe and vibrant community to live in. By working together and talking through all the issues, I am confident that we can get through this difficult period and set in place a plan to put Shetland on a good financial footing into the future."
The reports mentioned are available here (Items 4 and 5):
http://www.shetland.gov.uk/coins/Agenda.asp?meetingid=3388