Charitable Trust, independent of Council

[Ghostrider]

 

Shetland's oil money for dummies type explanation required here.

 

The Charitable Trust we kinda know about, its been through the press enough lately that's its skeletons have mostly all be well rattled. Its (theoretically at least) a self-sufficient (supposed to be) stand alone fund, entirely seperate from the SIC, run by a bunch of unevictable unmentionables.

 

The Reserve Fund is very much another type of beast though in my understanding. Correct me where I go wrong here, as I surely will, but is it or isn't it still a wholly SIC thing? Likewise, is or isn't the 'Reserve Fund' the same thing as the 'SIC's Reserves'? My understanding is that the Reserve Fund is SIC run, but that would seem at odds with it being a charity, or would it. So???? My understanding also is that the 'SIC's Reserves' is a wholly different bank account to the 'Reserve Fund'. and is most definitely wholly SIC controlled. Yes/no?

Pretty much. The Councils Reserves are entirely separate from the Charitable Trusts funds and is controlled directly by the SIC. Currently the return we receive from investing this money is used to fund services (in effect "topping up" the funding shortage from Holyrood).

 

So, just to be 100% clear on this. The pot of money officially known as 'The Reserve Fund' and last heard of being worth somewhere in the regions of £200 - £220+ Million, which, I understand was created from the operating profits from Sullom Voe, is the same thing as 'the Council's reserves'.

 

Apologies for perhaps appearing to labour the point, but the media, either don't know or don't care to make clear whether or not they are talking about one pot of money or two, when they variously refer to the 'Reserve Fund' and 'Council reserves'. Leaving us who probably should have been paying more attention sooner, unclear on just what money exists, and what name is painted on the piggy bank its in..

Edited November 4, 2017 by Ghostrider

[Urabug]

Well Ghostrider there was certainly two separate funds initially created one was the Council oil reserve fund and the other was the Shetland Charitable Trust .I'm not sure but I think they were separately managed but with the passage of time many changes have occurred and I also find it difficult to distinguish whether "the reserve fund and the charitable fund are one and the same now.

 

A clue might be, why would the council raid the charitable funds if they already have other reserves.

 

Why would OSCR get involved if the council were not spending charitable money indiscriminately,surely oil reserves that were being squandered and not charitable would not have attracted their attention.

 

I could be and I probably am completely wrong just ma'be some kind soul out there will correct me.

[Ghostrider]

^ As I understand it, The OSCR got involved due to the majority of SCT trustees being Councillors, arguing, that being the case the SCT was not an indpendent body, but an integral, or at least semi-integral part of the SIC. There was the long running argument with the auditors or some such wanting SIC and SCT accounts to be submitted as one set of account rather than seperate, on account of the "special" relationship between them or similar.

 

You're right, to the best of my recollection back in the dark ages the 'Shetland Islands Council Charitable Trust' and 'The Reserve Fund' were set up by the SIC and managed as seperate funds. The SICCT was funded, I believe, from various argeements with and payments from the oil industry, there was so-called 'disturbance money', the much derided '1p/tonne' levy on throughput and god knows what else. The Reserve Fund on the the hand, was wholly financed from the profits the SIC made from operating the 'Port of Sullom Voe' over the years - How this occured when a local authority is disbarred from running a commercial enterprise by EU regs, I dunno, but its a whole other question.

 

The SICCT has evolved in to what is the SCT now, theoretically at least, supposedly a stand alone organisation wholly indpendent of the SIC or any other organisations control..... The Reserve Fund still exists as a seperate entity still wholly under SIC control, as best as I can understand it.

 

What I'm not clear on is whether The Reserve Fund and the £200 Million or so that's said to be in it is all the SIC has "under the bed", or not.

 

Given that The Reserve Fund apparently exists wholly from operational profits from Sullom Voe and the returns on the investment of those funds, what happens to the SIC many other income streams.

 

They're involved in numerous activities commercially that should be bringing in something, leasing/renting of land/properties, operating all the other harbours in Shetland unless Lerwick etc, Even just budget surpluses at year's end. Does all of that just get thrown in to the general kitty and swallowed up in ongoing routine expenditure, or has it been salted away somewhere as a seperate general "reserve".

 

The cynic says the SIC is incapable of producing a year end budget suprlus, or making a profit on a commercial venture, and consequently the chances of a seperate "reserve" existing are nil, but I'm prepared to be proven wrong.