Convener vows to go to House of Lords to safeguard future of charitable trust

Shetland Islands Council convener Sandy Cluness has vowed to go to the highest court in the land to try to stop the local authority losing control of the £200 million Shetland Charitable Trust.

In an outspoken intervention on Thursday at the trust Mr Cluness warned that moves to reform the 33-year-old charity by replacing councillors with independent trustees were “a real mistake” and “dangerous to the future of this community”.

But independent trustee John Scott accused the convener of putting the trust’s charitable status at risk and being prepared to tear up the £3 million it saves in tax each year just so the SIC could keep its hands on the trust.

The trust is currently consulting the public on a proposal to leave just eight of the 22 councillors on the trust while boosting the number of independents from two to seven. The trust would be looking for a wide range of skills among any independents who decided to apply and they would be vetted and chosen by existing trustees.

Three weeks have passed since the proposal went out to consultation but trust general manager Ann Black said just 10 responses had been submitted by people with just a week to go and community councils were responding with no comments to make. A report on the outcome of the consultation will not be ready until February when trustees will vote on their future.

The move towards reform is in response to concern within Shetland about the council’s stranglehold on the trust and to pressure from the new Office of the Scottish Charities Regulator (OSCR) for the trust to be overhauled to show “better and more obvious evidence of independence” from the council if it wishes to retain its charitable status.

The convener, a former lawyer, has been implacably opposed to trust reform since the debate started. He said the trust had been highly successful since being built up on the compensation paid to the council by the oil industry for the disturbance caused by Sullom Voe Terminal and he questioned whether the legal agreement could be changed to remove the council without jeopardising the trust funds.

He was not prepared to accept that the trust had to go down the road of massive change without first testing that requirement in law, perhaps by seeking a judicial review. He called for the trust and the council to go together to the Court of Session or as far as the Supreme Court of the House of Lords to gain a ruling that the trust in Shetland is a unique organisation and should continue “more or less” as it is.

A move is now under way in Scotland to amalgamate public bodies, Mr Cluness said, yet councillor-trustees were busy considering pulling apart a public body which had done 30 years’ good work. “We’re a bit like turkeys voting for Christmas,” he said.

Councillor-trustee Rick Nickerson supported going as far as the House of Lords to protect the current trust vehicle.

It is not clear what fears councillor-trustees perceive from bringing in more independents to the trust although the SIC would have less say over its £13 million-a-year expenditure.

There is also likely to be concern that opponents of the Viking Energy windfarm, which the trust has a 45 per cent share in, might be able to help derail the project if they were to get on the inside.

Mr Scott accused the convener of trying to ignore the fact that there was a parliament – which he reminded Mr Cluness was above the SIC – which had passed a charity law requiring bodies like the charitable trust to change their governance. Defying it was irresponsible, he said.

Gary Robinson agreed, saying that the reform should be viewed positively and the world had moved on a lot since the charitable trust had been formed. He viewed the threat of fighting the trust’s corner through the courts as “an incredible waste of public money”.

Chairman Bill Manson reminded trustees of the reality that OSCR had advised that the current set-up of the trust was unlikely to pass its requirements and it is awaiting the trust’s proposals for reform. “I do believe we need to comply with the law in this respect,” he said.

Trustees were generally quite charged up and they also had words to say about the lack of a written report on progress of the reform proposals – the second trust meeting in a row where the matter was dealt with merely through an oral update from trust general manager Ann Black and chairman Bill Manson.

Mr Nickerson said the lack of written information at the last meeting had left some trustees feeling “hijacked” into agreeing to go out to public consultation on a single proposal for reform. Iris Hawkins said trustees had been treated with contempt.

Mr Nickerson also accused Mr Manson of “bias” in a letter he sent to OSCR which he said gave the impression that only a few trustees were against change. He said correspondence he had obtained from Mr Manson also showed that the chairman had omitted to tell trustees that OSCR did not actually have the power to force the charitable trust to change.

He also took exception to the connotation that councillor-trustees could not act independently of the council and lacked the expertise to serve as effective trustees when in fact there was a wealth of knowledge among elected members.

In response, Mr Manson said OSCR was seeking enhanced powers to require charities to change but it could already enforce change in the long run.