Stark warning from regulator ahead of key charitable trust vote

The charity regulator OSCR has warned it may seek to suspend trustees and have Shetland Charitable Trust wound up unless “positive, urgent” action is taken tomorrow to reform the charity.

OSCR’s chief executive David Robb has lost patience with the £200 million charity and issued the threat after learning of continuing dissent over the changes agreed by the trust in December last year.

In a letter last month he accused trust vice-chairman Jonathan Wills and his supporters of “flouting” the findings of the trust’s own reform group by persisting with their call for the eight independent trustees who will sit on the charity to be elected by the people of Shetland instead of being selected by a three-strong panel chosen by trustees.

Mr Robb suggested any trustees dissenting from the reforms approved by OSCR in July should consider their positions. He made it plain that misconduct proceedings could result if the trust was to try to put forward an alternative reform proposal at this late stage.

The high-stakes intervention is the latest in a series of damaging skirmishes between Scotland’s biggest charity and its official regulator which has threatened repeatedly to take drastic action. It maintains close scrutiny of all trust business and requires to be kept fully informed of activities.

Last year the council convener Sandy Cluness resigned from the trust in protest at what he saw as moves by centralised forces to bring Shetland to heel. He feared it would destroy the good work in the community done by the council and its satellite trust since the 1970s.

Mr Robb said OSCR would prefer not to have to resort to action against trustees in the Court of Session but warned: “Should there be any delay implementing the approved reorganisation scheme, OSCR will proceed to examine the options available.”

The proposals for the new-look charity were finally approved by OSCR on 3^rd July following four years of procrastination and delay by trustees and a long public consultation, which gave rise to 68 objections.

Since then OSCR has already castigated the trust for failing to rubber-stamp the change within two weeks of official approval.

Mr Robb expressed “considerable disappointment” that some of the trustees were still unwilling to proceed in the manner already agreed with the regulator.

The deadline for implementation is 31^st March next year at the latest.

The trust’s legal advisers Turcan Connell have confirmed to trustees that failure to implement the scheme will be treated “extremely seriously” by OSCR. Actions could include suspending trustees and staff, taking control of spending, freezing bank accounts and having the charity shut down with its assets transferred to another charity.

If trustees do knuckle under tomorrow, as their lawyers recommend, the job of recruiting members of the public to be trustees will get under way immediately.

The process will be conducted by trust chief executive Ann Black. Trustees would be selected to join seven councillors and the two existing independent trustees, Bobby Hunter and Valerie Nicolson.

Turcan Connell said that once the new-look trust is in place the charity will at last be free to concentrate on its work rather than its internal structure and governance. It should be more secure against allegations of conflicts of interest and free to engage more confidently in business dealings with Shetland Islands Council.