Catrine Community Trust

East Ayrshire Council has received a number of complaints in relation to Catrine Community Trust and we would like to take this opportunity to clarify our position in relation to these matters.

Initially, East Ayrshire Council and Catrine Community Trust put in place a joint arrangement for the joint delivery of the Catrine Environmental Heritage Project (CEHP). This was described as a Partnership, but was not formally constituted as a legal partnership and did not therefore include all of the characteristics or prerequisites of a full legal partnership.

Both parties did operate under the auspices of the Partnership, but over time those arrangements were discontinued, whilst the parties continued to work jointly on a less formal basis to deliver the key elements of the project.

The initial arrangements, and actions of both the Council and Trust in this regard, are a matter of public record.

David Mitchell, Chief Governance Officer for East Ayrshire Council advised:

“We are satisfied that our own actions, and those of our officers and Members, throughout this process have been entirely appropriate, in good faith and above board at all times.

“We are clear that the discontinuation by both parties of the initial Partnership approach was not a material factor in the subsequent financial difficulties which the Trust subsequently found itself facing, although we are aware that other parties continue to promote an alternative narrative, albeit that is not supported by the established facts.

“We have set out our position on these matters in previous correspondence and in relevant reports to Cabinet and we are currently considering a formal complaint from a former member of the Trust, who has been advised that the revised timescale for a response to be provided to him is now by the end of September.

“This complaint was received in final form in March 2020, but we were unable to respond at that time due to revised arrangements put in place by the Scottish Public Services Ombudsman (SPSO) which dispensed with the normal 20 working day timescale for a response to complaints due to the COVID-19 pandemic.

“Notwithstanding the revised SPSO arrangements, which are still in place, a response will be provided to this complaint by the end of this month, and prior to the related planning application being presented to the Planning Committee for determination, which is currently likely to be in October as matters stand.

“That response will set out the Council’s position as stated above in full and further detail and the Council would invite those who presume to judge the merits of the matter to avail themselves of the full facts before doing so.”

The matter of the financial standing of Catrine Community Trust must also be clarified.

David Mitchell explained further: “In essence, Catrine Community Trust is technically insolvent and is currently only able to keep operating due to the support of both East Ayrshire Council and Social Investment Scotland, as the two major creditors.

“Without this support the Trust would need to cease to operate and to initiate insolvency proceedings.

“To date, East Ayrshire Council has provided a support package comprising

  • Approximately £259k write-off of loan debt due to East Ayrshire Council
  • An offer to acquire the CEVIC at its full value of £325k as per the survey obtained by the Trust
  • Approximately £60k additional grant funding, with the potential for a further £20k on top of that

“As previously reported to Cabinet, it is the Council’s view that the current agreement between the Council and the Trust, if implemented by the parties, represents the only viable option insofar as it would clear all of the Trust’s current debts and liabilities and allow them to continue trading on a scaled down basis, with a focus on the hydropower project and the continuing ability to generate approximately £100k income per annum for the benefit of the local community. The only legal alternative is the formal winding up of the Trust.

“With regard to the future use of the CEVIC building, the facility has not fulfilled its potential and the hall became a tea room which required substantial grant support to operate. The option of converting it for use as an Early Childhood Centre was seen as a way of ensuring that the building could have a future as a public asset.

“The Council had identified an alternative option for the delivery of 1140 hours early learning and childcare within Catrine and did not therefore have an absolute need to acquire the CEVIC building.  However, the CEVIC is considered to be a more modern and better facility and the Council was able to amend its 1140 hours programme to accommodate the acquisition of the CEVIC as an alternative to the current Early Childhood Centre in Catrine and as an alternative to insolvency for the Trust.

“We stand by the decisions we have taken and arrangements we have made with the Trust, always in good faith and with a view to maximising the benefits to the local community, even in the most adverse of circumstances.

“We note that the Trust has also appropriately taken independent legal, financial and specialist insolvency advice throughout the recent negotiations and decision making process and  we consider that the Trust, like the Council, has acted at all times in good faith and with honesty and integrity, in what has been a difficult and challenging journey for all parties.

“Both parties share the disappointment of the community that the original CEHP as intended has not been delivered in all material aspects, but that does not change the fact that the current deal between the Council and the Trust is the only option which will see the Trust continue, albeit in a scaled-back form, to operate the hydropower project and benefit from the future income.

“We simply ask those who would pursue an alternative outcome even at this late stage to note that should the deal not be implemented, the Trust is insolvent and will therefore need to immediately pursue formal winding-up.”