Budget for year ahead discussed by councillors

Elected Members have recommended Orkney Islands Council’s budget for the next financial year.

The Policy and Resources Committee agreed that £89.4 million should be spent on running Council services and that savings of £476,600 should be found during the year ahead. This is in addition to a number of savings already agreed by the Council for 2021–2022. These amount to £97,100.

Councillors also recommended:

• A freeze on increasing Council Tax charges.
• A 1 per cent increase in funding for voluntary and other Third Sector organisations.
• That existing fees and charges for most Council services should increase by at least 3% from 1 April. Exceptions would include charges that are set by legislation.
• That a contribution of £7.5 million should come from the Strategic Reserve Fund to support services during the year ahead.

OIC’s funding allocation from the Scottish Government for the year ahead currently amounts to £82.7 million.

If agreed by Parliament, this will include £7.9 million in funding for Orkney’s inter-island ferry service, a considerable increase on the allocation of £5.3 million awarded for 2020-2021.

It would ensure that the Council is fully funded to run the internal ferry services during the year ahead, allow the introduction of further all-year-round Sunday services and a Road Equivalent Tariff (RET) fare structure on local ferry routes.

Council Leader James Stockan said:

“I greatly welcome the Government’s commitment to increase our ferries funding after many years of campaigning by the Council. It is an important first step towards meeting our aspiration to provide a ferry service that matches the standards found elsewhere in Scotland’s island and coastal communities. We will continue to negotiate with Ministers on this.

“Compared to last year, there is a slight increase in the funding the Government is currently proposing to allocate to the Council for the other local services we provide.

“But in reality, this is at a standstill when growth in demand for services is taken into account, along with other factors such as inflation and the possibility of a nationally-agreed pay award for staff.

"Our annual financial support from the Government, on a like for like basis and without ferries funding is, per head of population, £353 less than the amount Shetland receives and £667 less than the allocation for the Western Isles. If Orkney was funded in the same way as the Western Isles, we would receive £14.9 million more each year to deliver council services.

“All of this means that we are setting the Council’s budget in difficult, challenging and uncertain times as we continue to respond to the pandemic – and look ahead to Orkney’s recovery from the severe impact it continues to have.

“To set a balanced budget, we are having to recommend a range of cuts to services. But great efforts have been made to lessen the impact on our community, our staff and the organisation itself.

“This is reflected in the highest ever draw we are proposing to make on the Council’s reserves – and in our determination to develop strategic income-generating projects to ensure we can continue in the long term to provide important local services.”

The measures put forward today would result in a reduction of two full-time equivalent (FTE) vacant posts.

The Committee’s budget recommendations now go to a meeting of the Full Council on Tuesday 2 March for further consideration.