Trust to seek legal view on need for reform after bad-tempered debate on its future

Shetland Charitable Trust is to ask the highest legal brain in the land whether it really has to reform its constitution by bringing in more non-councillor trustees.

The decision to seek expert opinion before taking any action was masterminded by council convener Sandy Cluness today, thwarting the latest reform proposals put forward by three of his long-time adversaries – independent trustee John Scott and councillors Jonathan Wills and Gary Robinson.

The convener has previously vowed to defend councillors’ dominance of the trust even if means going to the highest court in the land, the House of Lords, to fight off demands for reform by the charity regulator OSCR and some pro-reform campaigners in Shetland.

During bad-tempered exchanges in Islesburgh Community Centre, Mr Cluness won three votes by a margin of 12-3, 14-3 and 13-3. He argued it was premature to take action to change a trust which had worked successfully on behalf of the Shetland people for 30 years. He said he would refuse to stand down as a trustee unless OSCR could show the trust had been corrupt or incompetent in its relationship with Shetland Islands Council.

“This is one partnership that has been working and to break it up now seems a bit perverse,” he said.

He warned that letting independent and appointed people take control of the trust could lead to changes in the organisation that were to suit them, rather than the community.

His backer, Gussie Angus, has previously taken his own independent legal advice on the status of his trusteeship and potential conflicts of interest. He added: “We’ve absolutely nothing to hide and I don’t think we should be on the defensive about this at all.”

Trust chairman Bill Manson said it was unacceptable to OSCR to simply kick reforms into the long grass until after the council elections in 2012, as the trust decided to do in February.

But there is a sense among trustees that OSCR is not invincible and all-powerful, it already having been required to amend its ways after admitting mistakes in investigating two anonymous complaints brought against the charitable trust.

Clarifying his plan, Mr Cluness said he wanted “a serious player” in charity law, perhaps a judge, to examine the trust’s status and he did not see how OSCR could object to having its views on reform independently reviewed.

Mr Scott, who is a trustee by virtue of his position as lord lieutenant of Shetland, said the convener’s plan was merely a device to avoid change and spend a lot of money on legal fees.

He said OSCR and the trust’s lawyers Turcan Connell warned that what matters is the perception of outsiders that councillors have an irreconcilable conflict of interest when seeking to carry out their dual roles as elected members and the appointed trustees of a separate body.

He said the trust was being given good advice that the problem should be dealt with and he thought they should take it. But other trustees, including Rick Nickerson, said mere perception was a flimsy basis for OSCR to be challenging the make-up of the trust.

Mr Scott proposed a 15-strong trust with just three council members, 10 trustees elected by the Shetland electorate through a postal ballot in February next year and two appointed by the trustees to fill any area of expertise they felt was lacking. “It is a big change,” he said, “but I think a big change is necessary.”

His backer, Dr Wills, said it would be perverse not to offer OSCR a carefully thought-out proposal like Mr Scott’s. As for legal advice, the trust had already received the very best in Scotland from Turcan Connell and that was for councillors to relinquish control.

If action was not taken soon to end the councillor majority OSCR could step in and take over the trust, he warned, and its accounts could be forcibly grouped with the council’s, opening the doors to the trust’s £200 million being exploited by government. Failure to act by the trustees would be sticking two fingers up to the regulator, the lawyers and the people of Shetland.

Mr Cluness dismissed OSCR’s threat to intervene in the running of the trust and others too spoke up to say they were not frightened of big bad OSCR.

Laura Baisley challenged Dr Wills’ notion that the majority of islanders wanted reform – it was just the “voluble minority that he speaks to”, she said. Dr Wills took exception to the remark, appealing to the chairman not to allow personal insults.

The debate was a bad-tempered one with no sign that the promise to bury the blood-crusted hatchets from the Dave Clark campaign had been honoured.

Independent trustee Valerie Nicolson said she believed absolutely in the need for change, having sat on the trust for seven and a half years by virtue of being the Anderson High School head, with potentially another 17 to go. She was angry that having been appointed to the reform working group the final compromise proposal of eight councillors and seven independents had been unceremoniously rejected, leaving nothing in prospect until after the 2012 elections. She supported Mr Cluness in the hope that if the legal eagle advised a need for change all the trustees would readily agree and finally get on with it.

Gary Robinson said the convener’s course of action amounted to outright defiance of OSCR, condemning it as “procrastination instead of policy” and set to incur needless expenditure.

He put forward an unsuccessful proposal based on the conclusions of the group Ms Nicolson was involved in but creating a trust with an 8-7 majority of non-councillor trustees.

Betty Fullerton backed the pursuit of legal advice but with conditions attached, including requiring an answer within three months with a decision on reform to be taken by the end of the year. She too was unsuccessful in drawing colleagues away from supporting the convener’s straight-forward approach. He admitted the legal advice could be expensive but it was to protect a very valuable trust.

The campaign for reform of the trust has been partly driven by opponents of the proposed Viking Energy windfarm. Viking Energy Limited became a trust company after it was sold by the council which was not legally permitted to make money from selling energy. That law has now changed and at the meeting several councillor-trustees advocated bundling the controversial company back to the council in the hope that it will take the heat off the trust.

Iris Hawkins was one of them. She did not like all the trouble and expense caused by hosting Viking in the trust, likening it to a caterpillar thrown into a kale plant and eating everything around it.

Dr Wills countered that from caterpillars came beautiful butterflies. Viking was owned by the trust, he said, and it would not be in the trust’s economic interests to transfer it back.

Mr Angus said the transfer of Viking had been “a big big booboo that we made”. Other than that he challenged OSCR to identify even one issue where the trust had not behaved appropriately or where a conflict of interest had not been avoided.

Several trustees abstained during Wednesday’s three votes and on the final vote Dr Wills did the same, making it known that he disassociated himself from what he called “this folly”.