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Trust plays down stock market losses

SHETLAND Charitable Trust has downplayed figures that reveal the value of the charity’s investments have dropped by more than £13 million in just six months.

The trust’s latest financial figures, noted at a meeting in Lerwick on Thursday, state its investments dipped by around £13.24 million in the first half of 2015.

In contrast, the same figure for 2014 showed a gain of £5.81 million.

The loss comes at a time when the trust is embarking on an era of financial restraint, with funding budgets over the next four years being cut amidst widespread criticism.

Speaking after Thursday’s meeting, chairman Bobby Hunter said the £13.24 million downturn was purely the result of instability in the financial market.

He said the fall in reserves from around £240 million to £224 million was little to worry about.

“It’s a reflection of the stock market – it’s as simple as that,” he said.

“We had it very good last year, and it’s been a not so good start to this year. While capital values have changed, we hope that our income will remain reasonably steady.

“You have to take a long-term view of the capital value – some years it goes down, some years it goes up.”

The organisation, which aims to improve islanders’ quality of life, announced a raft of cuts to Shetland organisations and trusts over the next four years in a bid to “secure the trust for the long term future”.

That issue is “completely separate” to the trust losing money on the investment, Hunter said.

“We’re trying to balance expenditure and income, which is different from capital assets.”

He added that the trust is “obviously disappointed” that it will miss out on rent income after BP confirmed its decision to bypass Sullom Voe Terminal when shipping oil from the Schiehallion field.

The trust’s rent income stems from a formula which takes into account the throughput of oil.

When Schiehallion imports were suspended in 2013, the rent fell by more than £300,000. The income did bounce back, but now the annual rent is down by £250,000 per year leaving it around £1 million year.

Hunter meanwhile issued a letter to local media this week to defend the trust’s funding plans.

It hopes to reduce annual spending to £8.5 million by 2020. However this means that funding given to organisations and groups across the isles, including community and voluntary projects, will be cut.

In his letter, Hunter said the trust had been spending at an “unsustainable rate”, which put the future of “arts, leisure, sport and heritage” in Shetland in danger.

He reiterated that he was not “unsympathetic” to those affected by the cuts.

Read Bobby Hunter’s full letter here.