Doubt cast on legality of referendum as trustees voice frustration

Plans to stage a community-wide referendum on the make-up of Shetland Charitable Trust remain shrouded in uncertainty after trustees heard today that there was “some doubt” about the legality of such a poll.

Legal firm Turcan Connell has indicated verbally to trust chairman Bill Manson that it is “at least dubious” whether the trust deed permits it to carry out a referendum. But the lawyers are waiting to hear what Scotland’s charities regulator OSCR makes of the idea before delivering fuller guidance to trustees.

In September trustees voted 11-9 to ask the community whether they wanted to maintain the status quo, plump for direct elections or endorse the trust reform group’s idea of selecting eight trustees to sit alongside seven SIC councillors. At present all councillors, except Allan Wishart, are joined by the Lord Lieutenant and the Anderson High School’s head teacher.

Mr Manson, who is strongly against the referendum idea, said it was his duty to examine whether the move could leave trustees at risk of being penalised.

At this morning’s trust meeting in Lerwick Town Hall, several trustees voiced frustration that little progress has been made. Councillor-trustee Gary Robinson said he was “really annoyed” at what he viewed as “prevarication”, while others questioned why the trust needed to wait for OSCR’s opinion before getting on with organising the referendum.

Jonathan Wills wants to see the situation sorted out before May’s council elections, and Betty Fullerton asked: “Why are [the trust’s lawyers] waiting for something from OSCR, which is a completely different organisation?”

Mr Manson said a “fair amount of preliminary work” had been carried out. He did not believe the referendum was being delayed, as it was unlikely to be staged until around February or March in any case. A number of details need to be ironed out, including whether Shetlanders over the age of 16 are to be included in the poll.

After Sandy Cluness sprung the surprise idea at the trust’s September meeting, Mr Manson dismissed the referendum as a “time-wasting tactic by the backwoodsmen”. He remains implacably opposed and points out that its outcome would not be binding on trustees, who would still have final say over the trust’s future direction.

“There is at least some doubt as to whether it’s a legitimate use of trust funds,” Mr Manson told The Shetland Times. “If OSCR decides it’s not, there is a possibility of penalties on trustees … or they might say ‘hold the referendum, but pay for it yourselves’.”

He added: “I think the trustees have a duty to make decisions regarding the use of the trust funds and on the constitution of the trust, and I think a referendum is an unnecessary step in arriving at the point where they make that decision, and one which soaks up some money.”

OSCR has been telling the £200 million trust for several years that it must make changes to distance itself from Shetland Islands Council. Mr Cluness – who was absent from today’s meeting – has fiercely resisted that notion, saying he believes the trust has done Shetland proud for the past 35 years. It had taken the trust more than 20 meetings over two years and extensive legal advice from top QC Roy Martin to draw up its proposal before the SIC convener deployed his bolt from the blue.

Trust general manager Ann Black said OSCR was being pressed for a response. Once the regulator makes its feelings known, a special trust meeting could be called. Last month David Robb took the reins at the charities regulator, replacing long-standing chief executive Jane Ryder, which may partly account for its delayed reaction.