25th September 2018
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Consultation to be carried out by OSCR over Shetland Charitable Trust changes

The charity regulator will carry out consultation before approving proposed changes to Shetland Charitable Trust.

In a letter to the trust’s vice-chairman, Jonathan Wills, the Office of the Scottish Charity Regulator (OSCR), has confirmed that it will shortly publish a “summary” of the trust’s proposed reorganisation “to allow for representations by interested parties” and will “fully consider” these “before deciding whether or not to approve the reorganisation”.

Dr Wills wrote to OSCR last month to complain that the public, and most trustees, had not seen the text of the draft trust deed before it went to OSCR’s Dundee headquarters. Nor, he said, had the trust consulted all the beneficiaries about its refusal to accept trustees who are directly elected to the trust.

He also pointed out that the draft deed appeared to be inaccurate, in that it listed the 2012 trustees rather than the current trustees, and inconsistent because it provided for Shetland Islands Council to nominate four councillor trustees under the new regime, whereas the council decided in June last year that it did not wish to have any. Instead, the council declared itself in favour of a directly-elected majority on the trust’s board.

Dr Wills has consistently opposed “the dilution of democratic control” at the trust. Last month he was one of three SIC councillors who declared they would not sign the proposed new trust deed, nor allow his name to appear on it, if it included a majority of non-elected trustees on the board.

Dr Wills appealed to the Shetland public to take this “last chance” to protest at the removal of democratic influence over the trust.

Jonathan Wills.

“Some people want all trustees to be elected and I sympathise with that. What I’ve suggested is a compromise, with eight of the 15 trustees being directly elected and the other seven selected. If enough citizens write to OSCR objecting to the undemocratic course this unelected majority on the trust is taking, then there’s a chance that OSCR will ask them to think again. If everyone just mutely accepts the loss of democratic control over almost half of Shetland’s oil money, then that’s the legacy they’ll leave to future generations of islanders. I’ve done my best to stop this but so far I’ve got nowhere. Now it’s up to the people of Shetland.”

OSCR has meanwhile refused to intervene in the dispute over a “take it or leave it” ruling by trust chairman Bobby Hunter that trustees cannot amend proposals from the trust administration at their meetings, but must either accept or reject recommendations in their entirety.

OSCR official Martin Tyson told Dr Wills he saw “no role” for the regulator in this matter.

Dr Wills said: “I find this very surprising. I’d always assumed that the role of a regulator was to regulate. But it seems OSCR is unconcerned that trust meetings are currently being conducted in a manner that effectively reduces trustees’ control of the trust, due to a wilful misinterpretation of the administrative regulations, based upon an erroneous legal opinion.

“Nor, apparently, does it matter to OSCR that recruitment of future trustees is likely to be undermined by this arbitrary and capricious conduct.”

The charitable trust has issued a “clarification” in response to Dr Wills’ statement about the apparent inaccuracies in the trust deed.

Referring to the reform of the governance structure, trust chairman Bobby Hunter said: “We have been advised by our lawyers that there is no need for an entirely new Deed of Trust to be drawn up, and instead trustees will vote on a resolution to amend the 2012 Deed.

“The names on the 2012 Deed are there by virtue of their being trustees at the time. It is very clear that they are not current trustees, and equally clear that those named individuals will not be ‘applying to change the Trust’s consitution’, as has been suggested.”

3 comments

  1. Alan Skinner

    I shall certainly be expressing my concerns to OSCR, as I have done in the past. However, I have found their response to be along the lines of “no trust laws are being broken, so we cannot intervene”. I would hope that they can be encouraged to be more proactive, because I see 2017 as a probable crisis year for SCT. It seems to me inevitable that SCT is going to have to write off its £10m investment in Viking Energy, and the Shetland people will be entitled to an explanation of why the investment was made in the first place. Surely, the Chairman, Chief Executive and several of the trustees will feel honour-bound to resign. Incidentally, it is now almost two years since Noble Grossart were appointed to advise on this investment. I eagerly awaited their report for a while, but suspect it has been shelved.
    I also see 2017 as the year when SIC will re-affirm its commitment not to put up councillors as trustees. This will create an election/appointment furore, which needs to be proactively addressed now, to avoid a crisis. It seems to me that we do not need a full-blown hustings type election, because we have elected community councillors, who would be perfect SCT trustees in my view.
    I would stress that my views are in no way personal towards the existing trustees, whom I am certain are well-intentioned individuals. In fact, I have only ever met one of them. My concerns are based upon 30 years in the trust/investment administration business.

    Reply
  2. Christopher Johnston

    OSCR’s website on SCT (http://www.oscr.org.uk/charities/search-scottish-charity-register/charity-details?number=SC027025) makes for some interesting reading.
    For the five years ending 31 March 2016, SCT overspent its income by an average of 4.41 million per year, with the smallest overspend being 3.63 million in 2016.
    “Raising funds” was 21% of the 2016 expenditures.
    SCT’s income has steadily fallen from 11.03 million in 2013 to 9.99 million in 2016.
    Investments provide 43% of the income, with the rest from “other trading activities” and “other.”
    It seems to me that governance is not the only issue with SCT. The yearly overspend nibbles away at the investments and income, and is not sustainable in the long term. And with only 232 million in trust assets at the end of its 2016 fiscal year, SCT cannot fund everything. A review of funding priorities would be valuable.

    Reply
  3. Peter Hamilton

    The responsibility for running the trust can not be placed on community councillors. They want direct elections for all trustees.

    The trust proposes to waste yet more time by asking the next council if it wants to provide a handful of councillor trustees, even though this has already been rejected, and wont allow amendments. This delaying tactic will remove councillor-trustees from the trust forever, breaking any link to democratic accountability.

    Having the people of Shetland elect the majority of their trustees means keeping the democratic link and speeding the chance to stop costly misadventures. It secures a regular public discussion about what these funds should and should not be used for – bankrolling speculative business ventures or directly improving peoples lives.

    The current trustees have no mandate for the change they propose. They are acting as a law unto themselves. However well intentioned they might think they are, they are allowing something repugnant to happen.

    It is not their money.

    They should not taking away peoples rights to control of their own affairs without asking. Taking without asking is wrong. There is a word for it. Who do they think they are?

    Reply

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