The charity regulator OSCR has ordered Shetland Charitable Trust to scrap its plan for a referendum.
It is also threatening to seek powers from the Court of Session to control the charity unless trustees act promptly to dilute Shetland Island Council’s stranglehold over trustee membership.
Ultimately the court could grant OSCR the right to suspend or remove those who control or manage the trust and to appoint its own trustee. Other powers available include stopping the trust spending its funds and removing its right to exist as a charity.
In an unusually stern and robust letter last week OSCR’s new chief executive David Robb has accused trustees of misconduct and ordered them to provide an undertaking before the end of next week that they will not pursue September’s decision to hold a referendum on trust reform.
By Christmas they must also provide OSCR with a timetable to implement the changes to the trust’s constitution which are required to address concerns about councillor-trustees’ conflicts of interest and to make it independent of the local authority, which currently holds 22 of the 24 trustee posts.
If trustees fail to act within the timeframe OSCR will issue an order preventing the trust using its own funds to hold the referendum. It will then petition the Court of Session for an order to allow it to intervene to prevent misconduct and to protect the trust’s funds, worth around £250 million.
The bill for any court action is likely to land on the trust’s doorstep.
Mr Robb, who took up his new post on 24th October, told trustees: “We are mindful of the protracted discussions we have already had and the absence of adequate action on the part of the charity trustees over the past three years. Given this, we will not hesitate to take the necessary action including seeking the necessary orders from the court if matters cannot be resolved to our satisfaction within a reasonable timescale.”
In a statement today trust chairman Bill Manson, who has been critical of the referendum proposal, said: “Given the inordinate length of time these discussions have taken, and with no early prospect of any decisions, it is not surprising that OSCR’s patience has worn thin and that it has imposed a very limited timescale to finalise our proposals for change. OSCR continues to seek that the changes be proposed by the trustees and it will then rule upon whether our proposals meet the legal requirements.”
But council convener Sandy Cluness, who led the call for a referendum, said he was minded to call on the trust to defy OSCR when it holds a special meeting in the next few days to consider what action to take.
He said. “I believe that the community has the right to say what kind of system they want without having one imposed on them. So my view will remain the same.”
The referendum is intended to seek the views of the people of Shetland on three options: should trust membership stay the same, change to seven councillors and eight independent trustees or become wholly independent with all trustees elected?