Page last updated at 18:12 GMT, Sunday, 25 January 2009

Islands 'protected' from downturn

fishing boat
The fishing industry in Shetland has seen one of its most successful years

Business leaders on Shetland believe the unique nature of its "mini economy" has protected it from the current downturn hitting the rest of the UK.

The islands are credited with having high employment rates and strong sectors such as fishing and the oil and gas industries.

Chartered accountant Irene Hambleton said island banks were "busy" and the local council provided reliable jobs.

The fishing industry has also just recorded one of its busiest 12 months.

In 2008, more than 10,000 tonnes of fish, worth 16m, was landed in Lerwick fish market.

Traders said they had been so busy that last year fishing boats had to be turned away due to lack of space.

Chief Executive of Lerwick Port Authority, Sandra Laurenson, told BBC Radio Scotland's Sunday Business programme that an extension to the fish market had recently been opened.

Reserves down

Ms Laurenson said: "We thankfully recovered from the days when fishing fleets were being decommissioned back to getting a focus on preserving our market share here in Shetland and part of that has been boats from outwith the island."

For several decades the council has squeezed financial concessions from the oil companies and spent the interest from its 0.5bn fund on providing better roads, leisure facilities, welfare and education services.

Jeff Goddard, who manages the portfolio of investments, admitted that since April 2008 the reserves had gone down by more than 100m.

The Shetland islands have so far escaped the worst of the downturn
But he said that did not mean Shetland had not been plunged into financial crisis.

Mr Goddard explained that because of the spread of investments - including shares in government and corporate bonds, plus a commercial property portfolio - the loss was having no immediate affect.

He said: "In two years time, if the markets have not come up we will have to either spend the capital of the funds, or we will have to reduce what we spend and if we reduce what we spend then that will affect the rest of the Shetland economy - but that is two years away."

Ms Hambleton, from chartered accountant Baker Tilly, said that the islands were fortunate in that they had their own mini economy which had been shielded from the effects so far of the UK-wide downturn.

She said: "It has its own infrastructure and services and high employment, primarily because of the local authority.

"It also has strong sectors in the food and oil and gas industry where the related services are very strong and that has been a big boost to Shetland."

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