Increase in Christmas bonus to help with high fuel costs rejected

By NEIL RIDDELL

A PROPOSAL that Shetland Charitable Trust should increase the size of the Christmas bonus it pays to pensioners and the disabled every year by more than 50 per cent fell on deaf ears this week.

The trust will this winter pay out £321 to every senior citizen in Shetland who chooses to apply for the bonus and councillor-trustee Allison “Flea” Duncan pleaded with fellow trustees to back his call to increase the payment to £500 – at an added cost of £580,000 to the trust in the current financial year – in order to help the elderly and infirm to cope with rapid global increases in the price of fuel and food.

But there were no backers for his suggestion, which would have seen the total price tag for the bonus scheme rise from £1.07m to £1.65m (excluding administration and taxation costs), at a charitable trust meeting in Lerwick Town Hall on Wednesday.

Mr Duncan said it would be an “exceptional” one-off increase to tackle the expected rise in the number of islanders suffering from fuel poverty – deemed to be those who spend 10 per cent or more of their income on heating their homes – which would then come under review again next year.

“Our senior citizens very much require that additional money,” he said, adding that recent reports suggested pensioners are now relatively worse off than they were in 1951.

There was a good deal of sympathy for Mr Duncan’s motives around the chamber, but charitable trust chairman Bill Manson said the idea that the trust alone could insulate pensioners against the blow of rising fuel costs was not one he subscribed to.

Referring to Mr Duncan’s suggestion that the hike in the bonus would be a one off, he speculated that the effects on fuel prices could be “greater or as great” in 12 months’ time and pointed out that if you were to turn on the spending tap, it was likely that there would be “huge difficulty turning it off again in future”.

Mr Manson agreed to write to the UK government asking them to consider the spiralling cost of fuel when deciding on the level of the winter fuel allowance for 2008/9.

Councillor-trustee Betty Fullerton said that rather than a “blanket increase”, existing schemes such as social assistance grants for those who were really struggling to find money to heat their homes would be a better way to go. “There are people [claiming the Christmas bonus] who probably don’t have the same need,” she said.

The Christmas bonus has been provided by the charitable trust since 1975 and the sum paid out was increased to £250 in 1999, since when it has been linked to the annual inflation rate.

In the 1990s there was some debate among trustees about whether the annual payment – which can be claimed by any retired or disabled islander, regardless of their financial status – should instead be means-tested but that was ruled out on the grounds that such an administrative process would prove costlier than the amount of tax the trust stood to save.

The trust is currently seeking the advice of charity regulator OSCR as to whether the payments ought to be viewed as charitable. Its charitable status has never been fully accepted by the tax inspector – the treasury will levy taxes of around £52,000 on the payments this year – but depending on OSCR’s opinion, the arrangement could be in line to change.

● Shetland Charitable Trust’s investment portfolio has now lost £9.4m on the stock market since the start of the current financial year.

The total value of the pot now stands at £175m, down from £193.4m in April, but that includes £9m which has been withdrawn from the share portfolio. Acting general manager of the trust Jeff Goddard said it would allow the trust to spend money on its annual commitments without having to sell shares if trustees do not want to.