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Weconcluded in February 2007 that, while the Shetland proposal had potential widerimplications for other local authorities, it was nevertheless reasonable to considerthe specific Shetland proposal on its own merits.

Communities Scotland willconclude its assessment of the proposal on receipt of a response from HjaltlandHousing Association on a suggested amendment to the proposal. Shetland Islands Counciland Hjaltland Housing Association will be advised of the outcome as soon as possiblethereafter.

Consideration of this proposalhas taken considerably longer than usual as a fundamental change to the rules foruse of additional council tax income is being sought. That has involved more detailedconsideration of the proposal itself and its potential wider implications.

An initial proposalwas received in January 2006, further information was sought by Communities Scotlandand that was received by May 2006. As the proposal potentially had implicationsfor other local authority areas consideration had to be given to whether a nationalapproach was required. That consideration concluded that the Shetland proposal couldin fact be considered on its own merits and that assessment is currently underway.

The main differencein the new programme is the introduction of tier 3 of Rural Development Contractsto be known as “Rural Priorities”, including the new entrants measure. This newtier will be competitive and build on the assistance available to land managersthrough a revised tier 2 of Land Management Contracts, now “Land Managers Options”which is available to all land managers and is non-competitive.