Shetland Islands Council has approved its first balanced budget since 1997 – described as a “milestone” by the council leader.
Back in 2011/12, the SIC drew down £36 million from its oil reserves – far more than it could afford – and was faced with the very real threat of becoming bankrupt within years.
But within three years, the current administration has been able to reduce its extra spending by 80% to £6.9 million in 2015/16, a level that can be met by the interest earned from the council’s £200 million reserves.
The budget will see council tax frozen for another year at £1,053 for band D property – the fourth lowest rate in Scotland – while most tenants will see no increase in council house rents. The average council house rent will be £72.04 per week.
Council leader Gary Robinson, who called the budget a “milestone”, said no one was under the illusion that the council was already out of the woods.
He predicted further tough decisions in coming years, but these would mainly be due to reduced government funding, and not the deficit inherited from previous councils.
Mr Robinson said: “We set today a sustainable budget, and yes there are challenges in the future, but we are now in the same position as any other local authority in that we just have to deal with whatever our budget settlement from the government is.”
As that settlement is as yet unknown, the council is prepared for further spending reductions in 2016/17, despite also receiving a return of around £10 million per annum from its reserves.
Chief executive Mark Boden said: “With the inevitable cost pressures of life we have to save around 2% per year, and that will go on for a long time.
“We are also anticipating, guessing almost, what the UK and the Scottish government are going to do in 2016/17 and 2017/18. What we think might happen is a further reduction in government funding which for us might amount to about £5 million.”