We’re not unsympathetic, says trust chief Hunter
Shetland Charitable Trust has faced some fierce criticism over recent months as the organisation has grappled to bring its finances under control. Chairman BOBBY HUNTER writes that spending had to be curbed or various sectors faced “fatal consequences” and he explains why there is still reason to be “positive”.
When I was elected chairman of Shetland Charitable Trust almost three years ago, it was very clear that trustees faced several major challenges.
In particular, we knew that we were spending our funds – funds each of us had been appointed to take custodianship of on behalf of the community – at an unsustainable rate.
The choice confronting trustees was straightforward: change nothing and preside over a trust whose financial policy was openly to spend itself out of existence, with potentially fatal consequences for the arts, leisure, sport, heritage and for voluntary and many other groups in Shetland, or adjust our spending to ensure the trust’s long-term viability.
Acting responsibly, we embarked upon a long and difficult process that culminated in the decision of trustees at their meeting in May of this year gradually to reduce spending to £8.5 million per annum by 2020.
Throughout the two years we spent working on our proposals, holding discussions with affected bodies and assessing the impact of spending reductions, none of us in our hearts truly wanted to take this road.
But at the same time we knew that we had to be realistic; that if we didn’t change direction the next generation of Shetland bairns would miss out on the benefits that past and present generations of bairns have enjoyed.
Inevitably, our decision generated criticism in the community, most of it focused on the short- to medium-term impact.
But I saw it, and still see it, as a positive decision which will ensure that quality of life in Shetland is enhanced for our grand-bairns and their bairns.
That does not mean, as some have suggested, that I am unsympathetic to those who will have to adapt to a new financial reality. Far from it. I wish the situation could be different.
We have done our best at a difficult time to minimise the impact: the reductions will be phased in over four years; the budget will be considered every year to ensure it remains relevant, and our spending will be fully reviewed in 2019-20.
We are also reviewing the other side of the trust’s activities – the investment strategy which determines how we go about earning money with the funds we have – and trustees will shortly be examining the outcome of that process.
But amid all these discussions, it is easy to lose sight of the fact that no other community in the country is fortunate enough to have an organisation like Shetland Charitable Trust.
And that is down to the foresight and wisdom of those within Zetland County Council and subsequently Shetland Islands Council in establishing the statutory basis for a body of this kind and then going on to create Shetland Islands Council Charitable Trust in 1976.
In recent years, the trust has evolved to adapt to reformed charity law and governance requirements.
But its original purpose of supporting charitable activity for the benefit of the inhabitants of Shetland remains unchanged.
And as such, the trust has a strong and positive relationship with Shetland Islands Council. We continue to work with the council and the other organisations in the Shetland Partnership for the greater good of the isles.
Change is not easy for any of us to deal with, particularly so in a community which has benefited so handsomely from the stroke of good fortune which smiled on us in the 1970s, in the shape of North Sea oil.
The wider challenge for the community is how to marshal what remains of the fortune as best we can for the future, and Shetland Charitable Trust will play a positive part in that.
Alan Skinner
I am sure that most reasonable people would have every sympathy for what Mr Hunter says, but for the elephant in the room, which is SCT’s investment in Viking Energy, which he has not addressed. Many of us feel that the project will never happen, because of the cost of the interconnector and political change. It is therefore possible, perhaps even likely, that SCT will end up writing off a £10m investment, which, if invested sensibly, could have funded many of the good causes that are currently experiencing great pain. Of course Shetland should be grateful for the existence of SCT, but we need it to be managed prudently.
Alan Skinner
John Tulloch
Mr Hunter is right, we’re lucky to have the Shetland Charitable Trust and – equally – the SIC’s remaining oil reserves. These do, indeed, exist because of the foresight of those in the then ZCC (SIC) and the MP at the time Jo Grimond.
Those same people, in 1979, recognised the potential conflict of interest between the isles and the central belt that would accompany Scottish devolution and the accompanying risk to the oil funds.
They demanded Faroese-style autonomy for Shetland if Scots voted Yes. It was discussed at the UK Cabinet and may well have happened but for the 40 percent threshold on the referendum which wasn’t met, so all bets were off.
The Shetland Movement, alas, not possessing the same acuity of mind, in the 1990s, took part in the Scottish Constitutional Convention and allowed Scottish devolution to pass without demur.
So here we are today with OIOF bogged down in “talks” going nowhere fast and the Scottish Islands Bill consultation, while government under-funding of e.g. education, is forcing rural school closures in an attempt to stem the draining of SIC oil reserves to the central belt.
Wir Shetland will not repeat that error.
Robert Sim
Unfortunately, John, your simplistic view of education funding in particular is wide of the mark. Education in Shetland since the early 1980s hasn’t been underfunded – it’s been overprovisioned. Or, to put it more accurately, successive councils chose to spend on average double what was nationally seen as an appropriate figure on education – and to do so they spent the reserves. We are not talking here about the quality of education, by the way, as other authorities have attained well with half the spending.
During the last decade and this, elected members were well warned (by – apart from internal voices – HMIe and Audit Scotland in successive reports) that the postiion was unsustainable; but nothing was done until the eleventh hour a year or two back. Now the SIC is having to handle controlling its budget properly for the first time together with cuts due to the austerity agenda at UK level.
That’s the reality. Speaking of which, the initiatives on which you attempt to pour scorn – OIOF and the islands Bill – are politics in the real world, where resources are finite and where politics is the art of the possible.
John Tulloch
Robert Sim, I beg to differ.
If Shetland’s education system was ever “overprovisioned”, it certainly isn’t now and it’s still £10Mpa short-changed.
Scottish Government funds are allocated by COSLA, as agreed by the SG in 2008. Shetland’s education is funded on a “per pupil” basis, as opposed to a “needs” basis. This method disadvantages rural communities versus cities and densely populated areas.
Education in rural places like Shetland cannot be funded in the same way as in a cities like Edinburgh. It costs much more for small communities with long distances and sea journeys between them.
John Swinney acknowledged that principle, expressing concern to COSLA when he allowed them to continue their allocation system into the 2015-16 financial year.
He had invited them to uprate their needs indicators in light of recent SG studies on deprivation. They declined and he “folded”.
SNP Finance Minister John Swinney agreed to let the existing system (pork) “barrel” on.
Gordon Harmer
“Cuts due to the austerity agenda at UK level”. It’s nothing to do with the council tax freeze then Robert. There has been no cut to what the Scottish government receive in real terms the figure has stayed the same. Local services including education have been hit by the unsustainable council tax freeze and that is a fact. Scottish education is under performing and as a devolved power it is the responsibility of the Scottish government, no one else.
Sandy McMillan
Come on Bobby how can the needy have a reasonable life, if you are hording what is rightfully theirs, who is still getting, yes them that don,t need why you are holding on to what is left is beyond believe, if its going to go why prolong the agony just let it go and that will be that, no more fighting over who should get and who should not.
Johan Adamson
They must drop the VE investment. I know they all meant well when it was first mooted and they could only see the vast profits propping up our spending sprees. But it is time to take stock, especially in the light of falling income from Schiehallion.
There is also a trust issue here where they need to do some work to reassure us that we can trust them with our money as much as we trusted the 1976 councillors. Part of this would be to be more open and honest and allow a referendum on VE.
Chris Johnston
Additional transparency in SCT’s public accounts would be a good thing.
I reviewed the accounts available on their website and they are very opaque (http://www.shetlandcharitabletrust.co.uk/assets/files/accounts/Annual-Accounts-for-the-Year-Ending-31-March-2015.pdf).
I could not identify the VE investment value nor any write downs that have been made.
I did notice in the last Note that SCT Renewables Ltd. invested £225,000 in 2015 and £900,000 in 2014 in Viking Energy Shetland LLP, in which SCT Renewables Ltd. is a 90% partner. Perhaps the total investment is now more than £10,000,000.
Kathy Greaves
Still Mr Hunter makes no mention of VE, what their plans are, what the £10 mil of Charitable Trust money ( meant for the benefit of the people of Shetland) has been spent on. Public consultations showed that we voted against it.
David Spence
Johan, I think the SCT has lost any positive attribute they may have had by, without consent of the people (taking into account the SCT were going to use a large percentage of ‘ Shetland Money ‘ on the money draining scheme known as the VEP) literally using millions on a project which should have been stopped in its tracks before it even remotely got off the ground. The VEP has already used up £11 million of Shetlands money on paying extortionate fee’s for a Feasibility Study which could have been done here, but worst of all, paying staff wages to a business which does not even exist……..unless in cloud cuckoo land.
Why oh why was this allowed to happen to the ridiculous levels that the position of the VEP is now? Will the ‘ private shareholders ‘ pay back the money they have received or has the SCT been stupid enough to allow ‘ certain loopholes ‘ to be incorporated into the agreement where they are exempt from paying back what they have borrowed?
There is a saying ‘ Never Trust an honest business person ‘. Never a truer word said when it comes to the VEP.
Alistair & Jane Inkster
“There is a saying ‘ Never Trust an honest business person ‘
Is there?
Here you go again casting aspersions at everyone in the business community.
There are honest and dishonest folk in all walks of life David, if the red flag wasn’t wound so tight around your eyes and ears you might be able to see this.
So I will leave you with a quote
“There are none so blind as those that will not see”
Alistair & Jane Inkster
Here’s another for you David.
When the debate is lost, slander becomes the tool of the loser.” ― Socrates
Michael Garriock
“Sympathy”, where do you cash that at? “Sympathy” pays no bills, but that’s all many disadvantaged folk get from the SCT these days, while able bodied and financially secure folk continue to enjoy free/subsidised “fun and games” facilities at SCT expense. This is not the vision of “charitable” most people were presented with as the MO of the SCT.
Yes, we know full well, and have known for a long time the the SCT was spending above its means, and needed to budget far more prudently, but removing direct funding completely from small but arguably high need groupings while still supporting largely frivolous ventures that the public in general can utilise willy nilly is not the “charitable” way to achieve it.
As long as the SCT is run by an incestous unaccountable clique following their own agenda of what they believe is “best for us”, the best end that can be made of the SCT is divvy up the fund by sending a cheque to all 23,000 or however many is in Shetland now, and close the thing down. Get trutstees put in by the owners of the fund, and accountable to them if you want it to survive.
David Spence
I would like there to be a ‘ public inquiry ‘ into the SCT, and who gave them the advice to invest in the VEP, the circumstances leading to SCT paying for another business to function (paying wages to staff, covering company costs, covering surveys etc etc). I would also like to know what financial contributions other people/companies have donated to the scheme or towards running costs from the start to present day.
If the impression given is negative towards the VEP, and the only financial contributor towards the VEP is the SCT, surely the people of Shetland have a right to know what the £11 Million VEP has received where this money has gone, and what other investors (if any) have also contributed as a percentage of the present cost of the project to date?
iantinkler
Good bye £10 million, now how come SCT just lost a further £13 million? These best advisors again?http://www.telegraph.co.uk/news/earth/energy/11994954/Amber-Rudd-end-to-pursuit-of-green-energy-at-all-costs.html
iantinkler
Now VE appears dead in the water, time for a few new faces at the SCT? Surely we have seen more than enough of these speculative and incompetent gamblers of Shetland’s precious funds. Now we may not have our enviroment soldut out for filthy lucra after all.Whoop, Whoop, Whoop. I for one am not sympathetic to these gamblers of our funds, I just hope they can be held to account.
John Irvine
But Ian will they be held account?
I would love to say what I really think on here tried before but they won`t print it (I`ve tried before)
Anyone with an ounce of “midder wit” could have foreseen this and can see what is going on.
At the end of the day the SRT and ultimately the people of Shetland has lost £millions over this Lunacy.