David Clark was Alistair Buchan's predecessor as chief executive of Shetland Islands Council. He was in post from June 1st 2009 until February 24th 2010. Here, for the first time since his controversial departure, he writes about the council that could have been, and the 'golden future' he believes Shetland could still have.
From the relative tranquillity of Dalzell Castle, I often take the time to catch up on Shetland's news. Judith and I still have significant personal and business interests in the islands, which I always was proud to consider home.
Of late, it seems there has been some degree of panic peddling, especially with regards to Shetland's finances and her prospects. To read some of the comment, you would think the Shetland Islands belong to Greece! Whilst there have been attempts to put some positive focus on understanding what future Shetland's various communities wish to see, yet again the debate appears to be dragged down by ridiculous assertions of pending bankruptcy or an imminent toppling over the financial precipice.
The irony is that Shetland's financial position and prospects are far from dire. Indeed they are the envy of all Scotland. The risk is that by not recognising this and protecting it, the community of Shetland risks losing it all.
Community Funds
Let's have a look at how things stand now. The reality is that Shetland has around half a billion pounds of community reserves for a population of 22,000. OSCR continually bleats about how the management of these funds is structured. Yet rarely, if ever is the fact made clear that under the Zetland County Council Act 1974, control of how these funds should be spent for the benefit of the community is the responsibility of the Council. Not OSCR, not Audit Scotland, not the Scottish Government. Not even directly elected trustees. The legal responsibility lies with the SIC and it is difficult to view attempts to interfere in this as anything other than an attempt by the Scottish Government to get its hands on Shetland's money. I applaud Sandy Cluness for the way he has steered opposition to interference.
Oil & Gas
When I started as Chief Executive of SIC, the oil industry had been in decline for a decade. There was little expectation and no planning for any change. Yet even from my research I knew that technology was driving a revitalisation of East Basin oil. More interesting for me, I knew that technological developments meant that exploitation of the vast West Basin gas reserves was now viable. I acted quickly to set up a Strategic Oil Team to assess and address the opportunities. Key to this was appointing one of our corporate lawyers to manage this project full time. It was with some pride that the executive suggested and agreed that the best choice was my childhood pal, Paul Wishart. I was careful to declare this friendship before any decision was taken.
Within weeks, meetings with Taqa and Total confirmed my expectations that we were on the threshold of new era of oil and gas development. Our arrangements now in place, I had the privilege of leading a strong, focussed and dedicated negotiating team. Without going into the detail of the negotiations, which is a story in itself, it's worth quoting Total Laggan-Tormore Project Director Robert Faulds, as reported in The Shetland News (20/3/11):
The SIC negotiating team were “very good at their job” and had “squeezed every last drop” out of the company, Mr Faulds said, adding that such a financial deal with a local authority was unique in his experience.
"However, our principal financial contribution to the local community will be via a ‘throughput levy’ paid to Shetland Islands Council (SIC) on all gas that flows through the new Shetland Gas Plant, currently under construction at Sullom Voe.
“On behalf of Shetland Island residents, this form of community support was the option specifically requested by SIC when plans for the development of our Laggan and Tormore fields was being agreed. The levy will translate into a major investment into Shetland’s future sustainability and infrastructure and the well-being of its citizens."
The real beauty of the deal was that ALL West Basin gas would come through the pipeline, and deliver SIC the throughput levy.
Based on Total's commitment, this will deliver to the SIC £200 million, conservatively. Based on industry projections, the real income is likely to be closer to £1 billion. It could outshine the 70s oil revenue!
Shetland is not poor. She will not be poor in the next 40 years. However, this side of the equation keeps being omitted. Unless Shetland is aware of this vast wealth which is coming her way, how will she mobilise to protect it from the greed of central government?
These are vast resources which must be protected. They must also be managed wisely....
