In a new report, the Accounts Commission highlighted that Orkney Islands Council faces particular challenges in delivering and maintaining services to its island communities. This includes relatively high costs and difficulty recruiting and retaining staff.

The council also has significant opportunities, which the Accounts Commission has said it must use to its advantage. These include abundant natural resources as well as very positive relationships with its communities.

While the council maintains a clear strategic direction and priorities, the Accounts Commission has expressed concern about the discrepancy between its ambitious transformation plans and its ability to execute them.

Most pressing is the funding gap of £27m, which looms over the council between now and 2028, necessitating urgent action in financial planning, capital project management, and climate change initiatives.

Ronnie Hinds, chair of the Accounts Commission, said: “Orkney Islands Council benefits from its rich natural resources and the legacy of its significant strategic reserve fund, with money available to benefit the Orkney Islands and its local people.

“But facing a significant gap between the costs of its services and its annual funding, the council urgently needs to improve the delivery of its plans for transformation, halting the unplanned depletion of its reserves.

“We need to see a robust plan delivered this year on how reserves will be used, to achieve lasting changes for local communities and future generations. A vital part of this will be frank discussion and engagement with island communities.”