GOVERNMENT inspectors said yesterday that Orkney Islands Council and its social work department had done much to rebuild public confidence in the wake of the child-abuse scandal of five years ago.

However, the report from the Social Work Services Inspectorate does highlight some areas of concern and lists a number of recommendations which they want acted upon.

Scottish Office Minister Lord James Douglas-Hamilton welcomed the report but said it was clear that there was still room for improvement in the quality of services for people on the islands.

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The report, titled Rebuilding Confidence, was commissioned by the Secretary of State after Lord Clyde's inquiry into the South Ronaldsay child-care case of 1991, in which nine children from four families were taken into care amid allegations that they were the victims of a paedophile ring.

Earlier this year, Orkney Islands Council issued a full apology to the families, acknowledged their innocence, and paid them compensation.

The report's findings state that the main mistakes made during the 1991 case would not now be repeated because of new practices brought in by the islands council. Orkney's social work department was said to be showing a ``real commitment to collaboration'' and to working with other agencies.

The report also reveals that the number of child protection referrals in Orkney appears to be increasing. In 1993-94, Orkney reported 12 referrals, involving 14 children. In 1994-95 the number of child protection referrals increased to 20, involving 36 children.

The investigation team of four found that distrust of social workers on the islands was subsiding but there were still problems. For example, GPs were sometimes reluctant to be involved in child-protection cases to the extent that, on occasion, they refused to examine a child for injury.

Both social workers and families report that parents being investigated were very anxious that their children might be taken into care and that they needed a lot of reassurance it would not happen. In many cases, they referred back to events on South Ronaldsay in expressing their fears.

The decision by Orkney Islands Council last March to pay compensation to the four families involved is looked on by the inquiry team as an important step in the rebuilding process.

Despite making it clear that the developing confidence is justified, the inspectors recommend that the social work department should distinguish its separate functions from those of the police more clearly. They should also consider with the police whether there is a real need for police officers to be directly involved in all child-protection inquiries.

The social work department is also expected to continue to listen more to the concerns of the families it serves. Inspectors highlighted further work that is required to improve social work services for people with dementia and people with learning difficulties.

Lord James said he was pleased to see that public confidence in the council's social work department was being re-built after the events of 1991.

``There is still room for improvement in the quality of services for the people of Orkney but it is clear from the inspectorate's report that the major mistakes made previously would not now be repeated and that there is good foundation for the development of better services provided in partnership with other agencies.''

The inspection follows up Lord Clyde's inquiry into the removal of children from Orkney in February 1991. Lord Clyde's report was published in October 1991 and contained 194 recommendations, the bulk of the recommendations relating to child protection.

The inspection covered all social work services in Orkney, including community care, social work with children and families, and the criminal justice system.

Local MP Jim Wallace said that although he was both encouraged and reassured by the terms of the report, there was no room for complacency. He had received assurances from the director of social services that points raised in the report were being constructively addressed and that some progress had been made since the actual inspection took place.

``There can be no doubt of the scale of the task of rebuilding public confidence in the aftermath of the sorry events of spring 1991,'' said Mr Wallace. ``I welcome the efforts which have been made by the council and the staff of the social work department to rebuild trust and which have been recognised by the inspectors.''

Dr Avril Osborne, director of community social services at the islands council, welcomed the report. She said: ``This is a largely positive report which acknowledges the considerable efforts which have been made locally to improve and develop a wide range of high-quality social services for the people of Orkney. The report does highlight some areas of concern but we are already addressing those particular issues.''

Councillor Jim Moar, chairman of the council's social work and housing committee, said trust was being steadily re-established with the community at large and with other agencies.

``I am sure that the inspector is correct when he states that the council's wholehearted apology to the South Ronaldsay families, reflected as it is by all the departmental staff's acceptance of their innocence, is the basis for rebuilding relationships with the community.''

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