Under the draft settlement announced by the Scottish Government, the main funding Orkney Islands Council receives to run services will be £67.615 million for 2018-2019.
This is a cash increase of £471,000 compared to last year, but when inflation is taken into account it means a real terms reduction of 2.3%.
To help offset this, the Government will allow Councils to raise Council Tax once more, having removed the Council Tax freeze in 2017-2018 that had been in place since 2007-08. Councils can opt to raise Council Tax charges by up to 3%.
A 3% increase in Council Tax in Orkney would bring in £268,000 in extra income. This will be a matter for Elected Members to consider when OIC’s budget for 2018-2019 is set in February.
The Government has also announced that within the settlement figure of £67.615 million it has provided additional funding for education, with Orkney’s share being £228,000. There will also be additional funding towards the cost of the living wage for social care workers with the Orkney share still to be confirmed.
The Government has so far not included any additional funding for the Council’s ask of fair funding for ferry services, which has been calculated as £5.5 million for 2018-2019.
OIC Leader James Stockan 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, but what is clear is that we are facing a reduction in Government funding, but perhaps on a smaller scale than anticipated.
“It is extremely disappointing that the Government has not included fair funding for Orkney’s inter-island ferry services at this stage in its draft budget, as this was clearly the will of Parliament when the matter was debated by MSPs on 6 December.
“The Finance Secretary stated during today’s debate that his door remains open for further discussion with parties and it is therefore welcome news that our battle for fairer ferries funding is not over.
“We are only looking for £5.5 million from a budget of more than £30 billion – we’re not looking for favour from Government, we’re simply looking for fairness.
“We face an increasing demand for many of our services and with less money to spend, difficult decisions will still be needed in the New Year. Work will continue over the weeks ahead, as we prepare for the meetings in February where we will set the Council’s budget for 2018-2019.”
