AN ELECTED member has suggested Shetland Islands Council (SIC) should engage with the Scottish Government’s new minster for public finance – local MSP Hannah Mary Goodlad – over funding concerns.
It came as Lerwick South councillor John Fraser criticised the Scottish Government’s “failure to recognise the value” of local government.
Goodlad, who was elected as the SNP’s first Shetland MSP earlier this month, was given the role of minister of public finance yesterday (Wednesday).
The topic of local government finance cropped up repeatedly in a meeting of the full SIC this morning (Thursday) as members discussed an update on the Accounts Commission’s look at ‘best value’ within the council.
One of the key messages from a recent Accounts Commission report on the SIC was that there needed to be a “step change” to achieve financial sustainability.
SIC leader Emma Macdonald said local government is being asked to do more with less resources to meet increasing demand, with core funding not keeping up with the pace of inflation.
This has been a common message which has emanated from the council chamber in recent years.
Green councillor Alex Armitage said it is not just the SIC which should bear responsibility for its funding gap, which last year needed more than £40 million of reserves to balance the books.
He questioned why the Scottish Government was not taking responsibility for eliminating the gap by increasing funding, and asked what the SIC was doing to lobby government to get a better settlement.
In response SIC chief executive Maggie Sandison highlighted how the council is a member of local authority group COSLA, which offers an avenue for engaging on issues such as increased demand and rising costs.
She also said the SIC has regular engagement with government ministers and secretaries, both at a Scottish and UK level, to highlight Shetland’s economic contribution and the need for investment.
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But Fraser suggested the SIC could go to Shetland’s new MSP, in her role as public finance minister, as a first step.
“You couldn’t make it up,” he added, referring to Goodlad’s new role.
“We have an opportunity to engage here on a regular basis for the minister for public finance.
“Let’s see what a ‘seat at the table’ actually means. The proof of the pudding is in the eating.”
Fraser added that it “cannot be overstated that there has been a year on year, on year, on year […] drop in finance to local government in order to deliver the services that it’s there to provided”.
He told the meeting that had the government grant increased in line with the rate of inflation over the last number of years then the SIC could have been within £10 million of what would be deemed a “sustainable” draw from reserves.
Macdonald, who was an election rival against Goodlad, said she wanted to give assurance that she “always makes the case for how Shetland needs to be given more funding” when engaging with government.
“Whether it’s COSLA, whether it’s in one to one engagement, I never waste an opportunity,” she continued.
“And I will continue to do, and will continue to have engagement with new ministers around Shetland’s needs.”
When the draft Scottish budget for 2026/27 was announced in January, then finance secretary Shona Robison said the government was delivering a “record settlement” for local authorities.
She had said that “delivering sustainable public services that meet the needs of communities is at the heart of our priorities”.
While expressing concern about possible nationwide public sector reforms, Fraser also praised the “significant progress” made within the SIC.
Examples he referenced included how the council is preparing to embark on a project on the strategic model of adult social care in addition to a review of support for learning, while a management restructure is currently taking place.
“I can see light at the end of the tunnel,” he said.
Menanwhile Shetland Central member Davie Sandison said despite a call for a tightening of belts, “we’re not spending more – everything is just costing more”.
SIC chief executive Maggie Sandison said the council is currently working on five out of six areas of improvement highlighted by the Accounts Commission.
“That’s a really good indication that as a council we are focused on best value and addressing best value,” she said.
She also said the SIC has been described by the Accounts Commission as a “top quartile council with good performance”.
Meanwhile with the SIC’s reserves valued recently at nearly £400 million, Shetland Central councillor Ian Scott questioned why the council was not more “outward looking”.
He said what is needed are more “progressive” councillors in the chamber following next year’s local government elections.
Scott also claimed a desire for tunnels in Shetland is “pie in the sky” as governments in Edinburgh and London “have no money”.
He proposed that a better idea instead would be a “decent ferry service”.
“There was no demand for tunnels up until about five years ago because our ferry service was really, really good,” Scott said.
“We have to celebrate our islands and celebrate the money that we have to help our people.”
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