Income from the oil and gas industry will help Shetland Islands Council to offset an expected £6million-plus drop in Scottish Government funding over the next five years.
But the local authority’s finance chief James Gray – whose latest financial plan will be unveiled to the newly-created policy and resources committee today – is warning that the tough spell for public spending in the islands is far from over.
The council is on course to be in a position to agree its first sustainable budget since the 1990s in 2015-16.
Mr Gray’s 41-page report predicts that Scottish Government funding will shrink from £85.7million to £79.1million between now and 2019-20.
That deficit will be plugged by an estimated £7million-£8million from the new Total gas plant and increased harbour revenue from 2015 onwards fuelled by the continued energy boom.
When the behind-schedule gas plant is fully up and running, Mr Gray estimates the council will reap a dividend of just under £3million a year in the final four years of this decade.
In the same time period, profit from the council’s harbour operations is likely to be about £5million a year.
Council leader Gary Robinson said income from Total’s gas plant was likely to be lower than previously anticipated, with fracking and shale bringing down the price of gas globally and slowing the pace at which gas from around Shetland is extracted.
But he felt that might not be bad news in the long term “because if throughput is lower at the start, all the gas will still have to come out at some point”.