A call has been made for Shetland Charitable Trust to stop paying a special islands allowance to its staff and those of bodies it funds, including the amenity, arts and recreational trusts.
Independent trustee Sir John Scott told a trust meeting today the bonus was “archaic” and a leftover from the 1970s oil boom days when extra payments were given to public sector workers to try to stop them being lured to big money jobs at Sullom Voe.
But while Shetland Islands Council employees get an island allowance paid for by the government the allowance paid for by the trust has to come from its own funds, generated by its investments in property and the financial markets.
Sir John said phasing it out could save around £1 million a year for the trust to spend on new charitable activities in addition to the £11 million it currently pays out. In the past it has spent as much as £18 million in a year.
The idea was contested by councillor-trustee Rick Nickerson who said the trusts needed to have salaries that attracted the best people. He warned that Shetland was possibly entering a boom time again with the danger that staff in the trusts might be lured away.
The trust agreed to impose a three-year budget freeze on the organisations it funds, forcing them to trim their spending and run their affairs without any extra money to cope with rises in inflation.
The big trusts will have to present their proposed budgets to their paymaster to show they are planning for a cash standstill or that they have found extra funding from elsewhere to pay for wage rises or growth in their activities.
Councillor-trustee Sandy Cluness welcomed the move to three-year budgeting which he said would help funded organisations which had found it difficult to operate on year-to-year funding. Given the climate of spending cuts he felt the funding freeze was “perfectly reasonable”.
Three-year funding allows organisations to plan ahead with more certainty and opens up more possibility of attracting matched funding for projects from organisations outwith Shetland.
Despite recent losses on the financial markets the trust is confident it will still be able to afford to spend £11 million a year until at least March 2015. Financial controller Jeff Goddard said things would have to be a lot worse on the stock market before he would have to come to trustees asking for spending plans to be reviewed.
Councillor-trustee Alistair Cooper was less confident. He said the trust would need to be absolutely sure nothing would come along and “bite us on the bum” which it could not afford to pay for, such as unforeseen expensive repairs to leisure centres and swimming pools.
Trust chairman Bill Manson could only give limited re-assurance. He said: “It’s the nature of the beast that you dunna ken what’s going to bite you on the bum … otherwise you’d try to skirt around it.”