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Regulator approves charitable trust reform

The offices of Shetland Charitable Trust are in Lerwick's North Road.

SHETLAND Charitable Trust’s (SCT) latest governance proposals, which could result in the £230m fund no longer having any elected representatives, have been passed by charities regulator OSCR.

Despite receiving nearly 500 representations against the plans and none in favour, OSCR said that the proposals – which includes reducing the number of councillor trustees from seven to a maximum of four – will allow the trust to be administered “more effectively”.

 Former SCT vice chairman Jonathan Wills, who campaigned the majority of the trust should be elected, responded by calling the ruling “unsurprising”.

However, he said he hoped the trust could be persuaded to change its mind if members of the forthcoming new Shetland Islands Council speak up in favour of a “democratic” trust.

Shetland Islands Council indicated in June last year that it no longer wished to put forward any councillor trustees, thereby creating uncertainty over the future make-up of the trust which holds a significant part of Shetland’s oil money.

Shetland Charitable Trust chairman Bobby Hunter
Trust chairman Bobby Hunter said the ruling means that SCT can now look ahead to implementing its new structure.

“I’m pleased that OSCR has approved the new governance arrangements that were voted for by a decisive majority of trustees on 12 May last year,” he said.

“We can now move ahead and implement changes which the charity regulator acknowledges will improve the administration of the trust.”

Also among the plans is the amendment of the trust deed to give trustees the power to make changes to the provisions of the deed if approved by a 75 per cent majority vote, and the modification of its objects clause to make it more up to date with current legislation.

The arrangements mean that there will be a minimum number of nine trustees and a maximum of 15, with up to 11 members selected by the trust.

The trust is currently made up of seven councillor-trustees and eight appointed trustees, but it argues reducing the amount of council members will mean there is less potential for conflict of interest situations.

The new proposals state that SCT’s selection panel can’t find a suitable candidate resident in Shetland, then a trustee living outwith the isles can be appointed.

Wills noted that the potential for future change now rests solely in the hands of the trust members. 

“What is interesting is that the remaining trustees have just acquired the power to change the trust deed again, without asking OSCR,” he said.

“This means that, legally, they are now the only people who can restore the trust to democratic control, by deciding to hold direct elections for future trustees.

“I hope the voters of Shetland will now ask all candidates in the forthcoming council election to say whether they wish to see a self-perpetuating clique on the trust or a directly elected majority of trustees.”

Speaking from Oakland, California, where he has just given a lecture about the origins of the Shetland Oil Terminal Environmental Advisory Group (SOTEAG) he said it was “ironic” that democratic control was lost on the same day he explained to university students how the Shetland Charitable Trust was set up “to ensure that the money remained under democratic control”.

“I am relieved that news of OSCR’s lamentable decision did not reach me before my talk at the Soka University of America,” he said.

“It would have been embarrassing and rather hard to explain to the students who, not surprisingly in view of current events on this side of the world, are taking a keen interest in issues concerning democratic principles.”

OSCR head of casework Martin Tyson said the proposals were passed because they meet “relevant reorganisation conditions”. 

The regulator added that there was no provision in terms of the Charities and Trustee Investment (Scotland) Act 2005 for someone to request a review or appeal the decision.

Nearly 450 messages of objection received by OSCR came through a campaign launched by local newspaper The Shetland Times.

“Shetland Charitable Trust applied for approval of a reorganisation scheme which would allow them to amend their governing document,” Tyson said.

“The scheme meets the relevant reorganisation conditions and, should it be put into effect, will achieve the outcomes required by law. That is why the Scottish Charity Regulator has approved it.

“When a charity applies to reorganise, we must assess any representations we receive either for or against the scheme. These representations inform the process but they don’t necessarily determine the outcome.

“Our decision is based on a set of legal tests that we must apply, and where the views of people making representations are relevant to those tests we take them into account. Where they aren’t relevant we can’t take them into account.

“We are responding to everyone who took the time to make a representation, and our letter explains our decision in detail. It’s now up to the Shetland Charitable Trust’s trustees to put the scheme into effect.”

Last year the pressure group Democracy For Shetland Charitable Trust was formed to rally against the trust’s governence proposals.

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