New proposal from John Scott seeks to end SIC’s control of £200m charitable trust

Two thirds of Shetland Charitable Trust’s trustees should be independently elected and only three should be SIC members.

That is the view of John Scott, one of the trust’s two non-councillor trustees, who is trying to reignite the debate about how to implement reform in the wake of renewed criticism of the relationship between the council and the £200 million community fund.

Mr Scott, who sits on the trust by virtue of his role as Shetland’s lord lieutenant, this week circulated an outline proposal and wants it – along with any other contributions – to be discussed at the trust’s next meeting on Wednesday 8th September with a view to reforms being in place to allow the election of new trustees by the end of March 2011.

In February this year trustees appeared to have kicked any kind of reform into touch until after the next set of council elections in May 2012, backing SIC convener Sandy Cluness’ move to block changes by a 12-3 margin, with six abstentions. But that was an act taken in defiance of charities regulator OSCR, which has repeatedly asked the charitable trust to come up with proposals to distance itself from the council.

Last week’s Accounts Commission report said the council’s approach to its relationship with the trust was “inconsistent” and “contra­dictory”. Mr Scott argues that criticism from the commission, OSCR and others makes it “no longer tenable – or desirable – for the council to continue to ‘control’ the charitable trust”.

Currently 21 of the 22 SIC councillors sit as trustees, the exception being Allan Wishart who stepped down to take up his role as co-ordinator of the Viking Energy windfarm project last year.

Mr Scott wants to see 10 trustees elected by the Shetland public, three trustees appointed by the council and two “co-opted” trustees who would be elected for renewable one-year terms.

Mr Scott will stand down from his position as lord lieutenant next year after he turns 75. As well as removing the lord lieutenant’s right to take a seat on the trust, he wants to spell an end to the seemingly arbitrary situation whereby the head teacher of Anderson High School, currently Valerie Nicolson, is also involved. Head teachers have traditionally taken little or no part in political debates at trust meetings.

Mr Scott told The Shetland Times: “It is vital that the trust has responsible trustees and I think that the proposal, based on the recent review of governance of the National Trust for Scotland, will deliver a good method of selecting able members of the public to be elected as trustees.

“I believe that the change will remove the difficulties that councillors have found with conflicts of interest between the council and the charitable trust leading to some perceived abuses. The other plus will be the clear divi­sion of accounts of the two bodies by the end of this financial year.”

Anti-Viking Energy campaigners have been pressing for reform on the grounds that councillors face an irreconcilable conflict of interest over the project in their roles as trustees and elected members. The trust inherited a 45 per cent share in the highly controversial project from the council almost three years ago.

Councillors were warned by SIC monitoring officer Jan Riise last summer that they could not objectively debate and decide on the windfarm as a planning authority and would risk being in breach of the councillors’ code of conduct if they did so. But members chose to “note” rather than accept the advice.

Mr Scott is suggesting that an interim committee made up of chairman Bill Manson, two councillors, the two non-councillor trust­ees and general manager Ann Black would manage the transition towards the proposed new arrangements. They would produce a matrix “matching the skills sought from candidates against the duties they will fulfil”, from which a “sifting process” would begin.

He said the proposal was intended to spark debate and represented only one possible way forward. Under his idea, once potential candi­dates had taken part in the sifting process – designed to assuage OSCR’s concerns over whether directly-elected trustees would have the right skills mix – even if they did not gain approval they would still be entitled to stand for election.

The ballot would be conducted exclusively through postal and electronic votes and no SIC councillor would be eligible to stand. Each voter would have 10 votes, one for each elected trustee. Once elected, no individual would be allowed to remain involved in governing the trust for longer than eight years.

Earlier this year Mr Cluness, who has always been resolutely opposed to diluting council control over the trust, persuaded members to scrap the proposal before them. That was to create a 15-strong trust made up of eight councillors and seven independent trustees, who would have been appointed rather than elected. Previously Mr Cluness had vowed to pursue the matter to the highest court in the land if necessary.

A separate attempt by councillor Jonathan Wills to have a 15-strong trust consisting of eight independently-elected trustees and only seven councillor-trustees was also rejected by nine votes to three, with nine abstentions.

The trust reform working group – made up of Mr Manson, Mr Scott, Mrs Nicolson and councillors Frank Robertson, Florence Grains, Jim Henry and Josie Simpson – was then expected to consider, at a leisurely pace between now and 2012, how best to modernise and distance the trust from the council.

The charitable trust invests £10 million in the local community every year, from income it makes by investing the community’s oil funds on the stock market. That sum chiefly goes on funding the amenity, arts and recreational trusts and care centres. It also funds a range of smaller organisations, schemes and grants.