£1.5 million funding cut for Orkney Islands Council

Under the draft settlement announced by the Scottish Government, the main funding Orkney Islands Council receives to run services will be £66.2 million for 2017-18, a reduction of £1.5 million compared to the funding provided for the current financial year.

To help offset this, the government has lifted the council tax freeze that has been in place since 2007-08. Councils can now opt to raise council tax charges by up to 3%.

A 3% increase in council tax in Orkney would bring in £240,000 in extra income. This will be a matter for councillors to consider when OIC’s budget for 2017-18 is set in February.

The government has also announced that it will be providing additional funding aimed specifically at education and health and social care.

Orkney’s share for education is expected to be £209,000, with the share for health and social care still to be confirmed.

OIC Convener Steven Heddle said: “The fine details of OIC’s share of the settlement still need to be gone through before we have a completely clear picture of our financial position for the year ahead.

“I welcome the government’s commitment to ensuring that councils will be paid the net income from development activity in their local waters that currently goes to the Crown Estate. We made a strong case for this through the Our Islands Our Future campaign as it will greatly benefit island and coastal communities like ours.

“I also welcome the government’s recognition that any money raised through the council tax should remain with councils to spend as they choose.

“It is inevitable that we will have to find savings to help us bridge the spending gap the reduction in our core funding will create. But we do have options to help narrow this gap. We could raise the council tax, increase the fees charged for a wide range of council services, and draw more money from the council’s reserves.

“It would be fair to say that the cut to our funding is at a level we anticipated and that we have been planning for. This will continue over the weeks and months ahead, as we prepare for the meetings in February where we will set the council’s budget for 2017-18.”