OSCR blocks charitable trust referendum

THE SCOTTISH charity regulator OSCR has threatened to take Shetland Charitable Trust to the Court of Session for misconduct and to restrict its spending after it refused to reform over the past three years.

Trutees have been dragging their heels in response to OSCR’s demand that the local authority’s control of its board must be brought to an end.


All Shetland Islands Council’s 22 members automatically join the board of the £200 million trust when they are elected, along with two independent trustees – the head of Lerwick’s secondary school and the local Lord Lieutenant.

However new charity regulations mean the trust must remove the council’s control, and all attempts to introduce an independent majority have faltered at the last hurdle.

Local government regulator The Accounts Commission have also qualified the council’s accounts for the past four years over its relationship with the trust.

OSCR’s patience has now run out after trustees voted on 21 September to leave the final decision on reform to the islanders themselves by holding a referendum.


Newly appointed chief executive David Robb has written to all trustees warning them that their actions to date amount to misconduct and has taken independent legal advice on how to bring the trust to heel.

He writes: “In the spirit of our engagement with SCT to date, OSCR would, of course, prefer that matters are resolved without the use of our statutory powers of suspension and direction and without resort to litigation.

“However 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 courts if matters cannot be resolved to our satisfaction within a reasonable timescale.”

Mr Robb has ordered the trust to abandon its plans for a referendum and given it two weeks to give an undertaking that a timetable for reform will be presented for OSCR’s approval by 22 December.

Failure to do so will provoke the regulator to restrict any funds due to be spent on a referendum and the trust will be taken to the Court of Session.

Trust chairman Bill Manson, who has always supported reform, said he was not surprised by the stance OSCR had taken.

He 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.”

The trust was set up in the 1970s to disperse community funds earned from Shetland hosting the oil industry for the past three decades. It funds 16 separate organisations which employ hundreds of people and has paid for leisure, welfare and amenity facilities the envy of the rest of Scotland.

Local government regulator The Accounts Commission have also qualified the council’s accounts for the past four years over its relationship with the trust.

OSCR’s letter can be found here.