Why finance matters to you

Finance is often understood in terms of visible charges: council tax, fees, and levies that arrive with an explanation attached. Those matter, and they are part of this section. But they are not the whole picture.

There is also a quieter financial dimension affecting Shetland households — one that does not arrive as a bill and is rarely discussed in everyday terms. It appears instead in official economic figures published by Shetland Islands Council (SIC).

These figures set out, in aggregate, how much revenue is raised in Shetland through direct and indirect taxation, and how much public money flows back in the form of grants, subsidies, and public expenditure required to run Shetland. The balance between those two numbers represents the amount left in the UK Treasury after Shetland’s needs have been met.

In simple terms, it is the amount by which Shetland subsidises the wider UK.

What the official figures show

The figures below come from official Shetland Economic Accounts published by Shetland Islands Council (SIC). They use the term Exchequer Balance to describe the net position after: (1) all direct and indirect taxes attributed to Shetland have been counted, and (2) all grants, subsidies, and public spending needed to run Shetland have been returned.

In the 2010 report (p. 43), SIC explicitly states an Exchequer Balance of £76.1 million (page 43). In other words, Shetland made a net contribution to the UK Treasury of £76.1 million in that year. In itself, that would be a surprise many and is worthy of explanation - but

In the 2017 accounts (p. 26), an Exchequer Balance of –£129.5 million was reported. This would imply the opposite: that Shetland was a net recipient, rather than a net contributor.

The key point is that the 2017 accounts were compiled on a different methodology from earlier reports. When the 2017 data are recalculated using the same basis applied in the 2010 report, the implied Exchequer Balance that we paid to the UK in 2017 was £139.7 million, in a year when when the SIC's total budget for use in Shetland was £103 million. Questions need to be asked. Why was the methodology changed? Was the new figure too embarrassing to be reported? We simply don't know.

To put the scale into household terms, Shetland has approximately 10,000 households.

£139.7 million ÷ 10,000 households ≈ almost £14,000 per household per year.

That represents money that left the local economy each year after Shetland’s own public services had been funded. That figure will probably be much greater by now. This is why changes in methodology — and clear explanations for them — matter.

Why questions arise

Questions arise from the handling of the 2017 Shetland Economic Accounts: their late publication in 2020 - 3 years late, the adoption of a methodology that differs significantly from earlier reports, and the absence of a subsequent update around 2024, despite what had previously appeared to be a regular reporting sequence every 7 years.

If our figures are correct, the Tax - Grants - Subsidies merry-go-round results in eye-watering figures ending up in the UK Treasury every year with no strings attached, no questions asked and a seeming need to obscure them.

These observations are not accusations. They are questions about transparency, consistency, and accountability. If official figures show (or don't show) large net transfers out of Shetland, and if the way those figures are compiled or reported changes over time, clear and accessible explanations matter.

We are actively pursuing these matters with Shetland Islands Council, and will publish their response when received.