THE NET assets of Shetland Charitable Trust has risen to over £309 million thanks to big gains on investments – but Brexit is providing uncertainty for the months and years ahead.
An annual report presented to trustees on Tuesday showed that there was an increase in funds of £20.3 million in the last financial year to bring net assets to £284.4 million.
But in the following three months to the end of June, the trust’s externally managed investments then shot up by a further £29.5 million to bring the total reserves to £309 million as equities performed well.
Chairman Bobby Hunter said it was another strong performance for the trust’s finances, but he admitted the situation is “very volatile” – especially as uncertainty remains over what effect the UK leaving the European Union in 2019 will have on the market.
“If you can tell me how Brexit’s going to go and the stock market is going to go, then I’d be delighted to hear your opinion on it, but there’s a tremendous state of flux at the moment and we’ll just have to wait and see what happens,” he said.
“That is why the trust always looks at market returns over the long term,” Hunter added in a press statement. “This way, we can inflation proof our reserves for the benefit of future generations.”
Total charitable expenditure for the last financial year, including depreciation charges, was £8.8 million.
The charity distributes funds to a range of organisations, including Shetland Recreational Trust and Shetland Arts, as well as the rural care model.
It is midway through a programme to reduce its expenditure to £8.5 million by 2020.
The trust also received £2.1 million in gift aid from its property arm Shetland Leasing and Property Developments Ltd (SLAP), which allows the company to avoid paying tax.
Around £2.8 million of income in total was derived from investments in Shetland in 2017/18, from SLAP, land at Sullom Voe Terminal and the district heating scheme infrastructure.
The charitable trust was originally funded by Shetland Islands Council’s (SIC) ‘disturbance payments’ from the oil industry between 1976 and 2000, but it now relies solely on its investment income.
It has come under fire, however, for not having any elected trustees after the SIC decided in 2016 that it no longer wished to provide councillor-trustees due to a perceived conflict of interest.
It currently consists of 12 trustees, with any new additions appointed through a recruitment process.
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