Councillors to begin debate on reform of charitable trust at regulator’s request


Councillors may lose majority control over a substantial chunk of Shet­land’s oil funds as the charitable trust begins to undergo a gradual process of reform this year, starting with a meeting later this month at which trustees will have to decide how to go about drawing up an action plan to change its con­stitution.

The move comes largely at the behest of charities regulator OSCR, which has asked the trust to come up with some outline proposals aimed at distancing itself from the local authority by 1st July this year, and a report is being prepared by new general manager Ann Black to go before trustees on 19th February on how best to achieve this.

The trust consists of all 22 of the SIC’s councillors and two indepen­dent members, Lord Lieutenant John Scott and Anderson High School head teacher Valerie Nicolson, but there has been clamour both within and outwith the isles for changes so that councillor-trustees no longer hold a majority controlling interest in the funds, which were last week valued at £147.6 million.

It is understood that one of the favoured options is for new trustees – possibly constituting a majority of the trust, with a reduction in the number of councillors – to be appointed through a recruitment process. The main motive of such an approach would be to identify any gaps in knowledge and expertise within the trust body and to appoint people who would bring some specific qualities to the table.

An OSCR spokesman said it was not taking any view at this stage as to how the trust ought to be reformed because its role was not to “micro-manage” charities. At this stage, it has set no deadline for reform but has asked the trust to set out in its submission a clear timescale for changes to take place. The spokes­man said: “We’ve asked them to provide us with an action plan as to how they propose to address our concerns.”

The issue of a conflict of interest between a member’s duties as a councillor and as a trustee has remained high on the political agenda since September 2007 when the trust agreed to take on the SIC’s interest in the highly controversial Viking Energy project to build a huge 150-turbine wind­farm in the north and central Mainland.

Trust chairman Bill Manson said this week that OSCR has clearly stated that it would like to see a greater proportion of non-councillor trustees on the charitable trust, but that the likely outcome in the short term would be the creation of a working group to look at possible options. Those “could vary quite widely from doing nothing to substantially altering the trustee body”.

The Trusts Reform Group set up last year wishes to see the intro­duction of separate direct elections to decide who sits on the trust but there is concern among some at the top of the isles’ political hierarchy, not least because an election would leave open the prospect of special interest groups gaining a majority – which it is feared could lead to the trust and the council rowing in opposite directions.

Spokesman for the group Gordon Dargie said the idea of the trust controlling non-councillor appoint­ees was “risible” and he wanted to see a proper process of change, adding that he felt direct election of independent trustees would be a “sensible arrangement”.

“That they will continue to do the appointing [means] that they will continue with the status quo – I don’t think that would be acceptable to a lot of people,” said Mr Dargie. “We look forward to an action plan but I hope there are other options on the table. This needs to be an action plan that is not just acceptable to OSCR but to the people of Shetland as well.”

There does appear to be a grow­ing acceptance among councillor-trust­ees that some form of con­stitutional change is now inevitable, though there are members who remain hugely reluctant to see any con­stitutional change – including SIC convener Sandy Cluness who has repeatedly called for the status quo to be maintained.

In November, a decision on taking responsibility for the £3 million expenditure – of which around £1.5 million has been spent to date – needed to take the Viking Energy project to the planning stage was deferred after some councillor-trustees said they did not feel comfortable voting without clear written advice from OSCR as to whether they should declare a conflict of interest.

A complaint was also submitted to the charity regulator about the trust’s initial investment decision to purchase the 90 per cent shareholding in Viking Energy from the council, but Mr Manson this week confirmed that OSCR has “no further queries” or comments to make in relation to that decision.

Councillor-trustee Gussie Angus – one of those who was clear that he had to declare an interest and take no part in any vote in relation to Viking Energy two months ago – said he was looking forward to challenging some of what OSCR had to say about the trust. “What I’m not con­fident about is that OSCR have really got a full measure of how the trust is structured and operates,” he said.

“The thing that seems to exercise them is the fact that the control is in the hands of 22 councillors, that it’s political with a large ‘P’. I would maintain that it’s not – the trustees represent the community of Shet­land, there’s no party politics, they hold their meetings in public, the minutes can be read in any library. There is very clear and transparent operation of the trust in a way that no other trust that I’m aware of in Scotland does – I don’t see that we’re in any way offending the principles that the government laid down for OSCR.”

A meeting between trust manage­ment and OSCR towards the tail-end of last year – which the trust had some difficulty in setting up, partly due to the fact that the regulator is run by a small staff – was described by Mr Manson as “helpful and instructive”. “We acknowledge the time given, from a busy schedule, by Jane Ryder, chief executive of OSCR, and her staff to discuss SCT business,” he said.


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