Referendum to be held on future of Shetland Charitable Trust

Shetland is to have a referendum on future membership of Shetland Charitable Trust after council convener Sandy Cluness successfully derailed the expected decision to end councillors’ stranglehold over the £200 million charity.

Trustees voted 11-9 to back his proposal for a community vote which was tabled out of the blue at today’s meeting of the trust. It managed to appeal both to his fellow opponents of reform and those advocating change. Even some who voted not to back the referendum admitted they had some support for the idea.

There has never been a Shetland-wide referendum despite calls in the past on a variety of issues including the Viking Energy windfarm and the cinema and music venue Mareel.

Trust chairman Bill Manson was fizzing after the dramatic result, condemning the further delaying of reform and those who initiated it. “Frankly I regard this as a time-wasting tactic by the backwoodsmen,” he told reporters.

The insult was retaliation for Mr Cluness’ remark that Mr Manson and some of his supporters held the Shetland people in contempt by considering them incapable of grasping the issues to be put to them at the referendum.

It has taken the trust over two years, more than 20 meetings of a reform group and extensive legal advice from Roy Martin QC, former Dean of the Faculty of Advocates, to work out a proposal which it was hoped would be acceptable to the majority of the 23 current trustees and to the charities regulator OSCR which has demanded that the trust distance itself from the council.

Mr Manson has grave doubts about the legality of asking the public to make a decision via a referendum which, if the vote was to scrap reform, could induce the trust to act illegally.

He admitted that even if the referendum backs reform it might not be possible to have any new arrangements ready before councillors go to the polls in next May’s SIC election.

He and independent trustee John Scott warned after the meeting that control of the trust within Shetland could even be in jeopardy once OSCR gets wind of the latest failure to accept reform and tackle the issue of councillors’ conflict of interest.

Mr Manson said OSCR was “dismayed” it had taken two years to get to the point of forming a reform proposal. It started monitoring the trust’s activities last year when progress halted but did not escalate its scrutiny when it saw progress under way again. “Today, with the cessation of progress I think they may take a different view,” he said.

OSCR’s monitoring could reach such a level that it strangles the trust, effectively preventing it operating, he warned. It could also disqualify some or all of the trustees and make temporary appointments charged with bringing the body to heel.

Sir John said he was shocked and ashamed at the “ridiculous idea” of a referendum and he felt the failure to decide on reform would further damage the trust’s reputation. He warned: “There must be a serious danger that our failure to reach a decision to reform the trust jeopardises the charitable status of the trust.”

The referendum he viewed as “a complete red herring” because the only people who could legally make changes to the trust were the trustees.

Although Mr Cluness won the day he did not provide details about the phrasing of the question in the referendum, which is often a contentious issue in itself. Indeed, Mr Manson believes some who supported him had become unwittingly confused about what he was advocating.

Broadly, the three options will be:

* retention of the status quo, with 22 councillors and two independent trustees, comprising the Lord Lieutenant and the Anderson High School head teacher;

* a new trust independent of the council with trustees elected to serve;

* eight independently selected trustees approved by the trust plus seven councillors, as proposed by the trust’s own reform working group.

All the details of staging a referendum will have to worked out by trust staff in the coming months with further reports put before trustees for decisions and with them quite possibly some bad-tempered debates.

One matter to be considered is Allison Duncan’s plea for the vote to be extended to everyone 16 and over, which could pose practical problems given that only over-18s are on the electoral register.

The attendance at the trust meeting in the Town Hall did not indicate great public interest in the issue of trust reform. Of the seven people who looked on, most were supporters of Sustainable Shetland, who are against the trust’s proposed Viking windfarm rather more than its constitution.

Sustainable Shetland chairman Billy Fox said afterwards he was disappointed the trust was prepared to have a referendum on reform but not on the windfarm. He admitted that the fight against the windfarm is what is driving his group’s clamour for trust reform and dilution of councillors’ control.

Mr Fox also attacked Mr Manson, who chairs Viking Energy as well as the charitable trust, claiming that his real agenda was not to appease OSCR but to make the governance of the trust expedient for Viking. He said: “I would put money on it that when he left the meeting his first call would have been to the Gutters’ Hut [Viking’s local office] not to OSCR.”

When the debate began Mr Manson called it a potentially very important day in the history of the trust and he hoped it would be important for the right reasons. He hoped the milestone would be agreement on reform, not Shetland’s first local referendum.

He dismissed the complaints of the Association of Shetland Community Councils and Sustainable Shetland regarding the lack of time for consultation before the reform plan went before the meeting.

It had not been couched as a consultation period, he said, and it had not been implied that any comments made could change the proposed reform. A consultation had been run for six weeks at an earlier stage, he said, and the public would have another opportunity to comment once OSCR published the proposal and sought responses.

Then the convener was quick to get in with his cunning plan. He repeated his long-held view that the public understood when it elected councillors they became trustees to look after the public funds created from council money and to undertake works for the Shetland community.

“I guess that had it not been for Viking Energy, OSCR would not have taken much interest in this particular organisation,” he said.

He did not believe the trust had a mandate from the community to make radical changes so a referendum would serve to gauge opinion. “That is the only way there can be a true measure of what the owners of the trust property believe.”

Backing Mr Cluness, Gussie Angus said there was no evidence of conflicts of interest among councillors sitting as trustees and it was merely a perception. He did not see why a ruling coming from what he termed a very small quango should determine the future of the trust and Shetland’s money.

Rick Nickerson said there was only a core of individuals who believed there was a problem with councillors sitting on the trust. They had a legal duty to act wholly in the interests of the community, he said, and it would be illegal not to act in the interests of the trust.

But Mr Manson urged trustees to make a decision to reform now after spending more than two years looking into it. Responding to the convener’s potted history of the trust, he pointed out that since 2000 payments from the council had ceased and the trust had become increasingly separate from the local authority.

OSCR had made it perfectly clear that it required change and although it was a small quango it had the might of the Scottish government at its back. The presence of Viking Energy in the trust’s portfolio had hastened the call for change from OSCR, he said, but it was clear that change was required regardless.

Council vice-convener Josie Simpson agreed, having attended 22 meetings of the reform working group and eventually coming to the conclusion that the status quo was not an option. “What I’m frightened for is what could be imposed on us,” he said.

Betty Fullerton might have supported the referendum if it had been proposed two years ago before all the review group work took place. She believed it would be difficult to ensure that the public had all the information on the trust and reform which had been available to trustees to help shape their decisions.

Mr Scott told trustees who wanted the public to make the decision that if they did not realise that the buck stopped with them then they really should not be on the trust. He thought it “quite sad” that his colleagues wanted to ask others to decide for them.

But Mr Duncan thought it would be a sad day for Shetland if the people did not get a vote. He believes they want an independent trust with all its members elected, not selected.

The 11 who voted for a referendum were: Sandy Cluness, Alastair Cooper, Addie Doull, Allison Duncan, Florence Grains, Robert Henderson, Andrew Hughson, Rick Nickerson, Gary Robinson, Cecil Smith and Gussie Angus.

The nine against were: Bill Manson, Betty Fullerton, Jim Henry, Caroline Miller, Valerie Nicolson, Frank Robertson, John Scott, Josie Simpson and Jim Budge. One trustee abstained: Laura Baisley. Absent from the meeting were Jonathan Wills and Iris Hawkins.