Reform kicked into long grass as trustees defy charities regulator

John Robertson February 12, 2010 0

Reform of Shetland Charitable Trust has been thrown out until after the next council elections following a successful act of sabotage led by council convener Sandy Cluness.

At the end of a long debate and after three votes on Thursday, trustees scrapped their proposal to create a 15-strong trust made up of eight councillors and seven independent trustees selected from the community instead of the current 22 councillors and two independents.

Instead, the next two years will be spent leisurely taking their time to find a better way to modernise the body and distance it from the council, seeking the community’s views in readiness for some sort of change after the elections in May 2012.

Mr Cluness has been resolutely against diluting council control of the £200 million trust and at a previous meeting vowed to pursue the matter to the highest court in the land. This week his first victory came relatively easily with a 12-3 margin in favour of kicking all unwanted reforms into the long grass. There were six abstentions.

Shetland Charitable Trust has slashed its spending plans by 16.6 per cent for the next financial year in one of the first alarming signs of public belt-tightening to come.

Trustees voted through a budget of £10.3 million for 2010/11, with nearly £2.1m having been shaved off the organisations it helps pay for and by increasing charges for care centres. Most organisations are being permitted a standstill budget for next year.

Negotiations with the amenity, arts and recreational trusts got them to agree cuts of £500,000. Around £570,000 was saved from cutting the Christmas bonus which was offered to all pensioners and the disabled, targeting it instead at people on benefits.

Next year the trust intends to tighten up a further notch in an effort to match its spending with its income of around £9m a year.

In the past the trust spent more freely (£12.4m this year), hoping to make the money back on a buoyant stock market. But that was before multi-millions were wiped out in the crash. The performance has improved but the trust is still about £20m below its reserves target of £220m.

Councillor-trustee Allison Duncan failed in his bid to win the Citizens Advice Bureau an extra £15,400 on its allocation of £147,665 to make a part-time welfare rights worker full-time, despite pleading that the officer would help people claim more of the benefits they are entitled to.

How the act of defiance will go down with the charities regulator OSCR remains to be seen. It had ordered the trust to submit a proposal for change by 1st July last year, having made it clear that the status quo was not an option.

OSCR had turned its attention on the trust to investigate a complaint received about councillor-trustees having a conflict of interest in trying to separate their roles. The issue is thought to have been sparked off by opposition to the council’s use of the trust to take on the controversial Viking Energy windfarm venture.

The solution was put forward by a special trust group after deliberating for a year and going out to public consultation. According to chairman Bill Manson it would be enough reform to get OSCR off their backs.

He warned that stopping progress towards change now would cause OSCR to “move up a gear” in its attempt to kick the trust into shape. Ultimately at stake is the trust’s charitable status which saves it around £3m a year in tax and around £100m during the history of the trust so far.

Mr Cluness has shown himself unmoved by such concern. He said the trust owed its existence to the council and over more than 30 years it had successfully invested £500m to make the community work and to prevent depopulation. With tough times ahead the council would need its close relationship with the trust even more than in the past.

He said he was not entirely against change but there was no need to “hurtle” into the trust’s current reform proposal. Two more years was a reasonable amount of time to properly consider how to change.

He expressed serious misgivings about the recent public consultation on the proposed change, which drew responses from 46 people, 10 community councils and one group. Many of the views came from familiar sources and he believed they were “in no way a reflection of what the people of Shetland think”. The trust deserved more, he said. “The review hasn’t demonstrated to me that the Shetland people want this particular change.”

He called for OSCR to come to Shetland to explain its stance and speculated that its views might even change after an election when a new government comes in. He was seconded by another of the old guard, Gussie Angus.

In an eloquent speech Jonathan Wills savaged the trust’s reform proposal, describing the seven independent appointees as “no more than puppets selected by a minority of councillors”.

He said the proposal was in danger of making the trust as much of a laughing stock as the council and rather than democratising the trust it would dilute it from being 91.6 per cent elected at present to 53.3 per cent, which was not an improvement.

His solution to help win back the trust of the public was to have seven councillors and eight independent trustees directly elected from the community who would also hold both the chairmanship and vice-chairmanship.

He deplored the trust’s failure to include the responses to the consultation among the public papers for yesterday’s meeting (not even a summary was provided), saying it was “contemptuous of the public” and he suggested they had been suppressed because they backed the eight independent trustee concept, not the trust’s desire to keep it down to seven. His bid failed by nine votes to three with nine absentions.

For full story, see this week’s Shetland Times.