Shetland Islands Council urged to act over £134m budget gap

Urgent action is needed to tackle a projected £134.3m budget gap at Shetland Islands Council by the end of the decade, according to Scotland’s spending watchdog.

A new report from the Accounts Commission warns that while services for islanders remain strong, the council’s continued reliance on its substantial reserves to balance the books is unsustainable.

Auditors say the local authority faces a funding shortfall of £134.3m by 2029/30 and must now take a more strategic, long-term approach to restoring financial balance.

The report highlights improvements over the past three years in how the council monitors performance and engages with the community on budget priorities.

But concerns remain about the pace of its change programme, with auditors urging councillors and senior officers to accelerate reforms.

The watchdog also found that Shetland has been slower than many other councils in adopting digital technology to support staff and improve service delivery.

Andrew Burns, deputy chair of the Accounts Commission, said people living in Shetland are currently receiving good services and acknowledged progress since the last review.

He said: “The council continues to draw on its reserves to balance its budget. That’s unsustainable and will impact future generations if not addressed.

“We’re calling on the council to urgently increase the pace of its change programme and prioritise the actions that will help it achieve financial sustainability in the medium to long term.”