Sleat Community Trust: Business Review
Summary Report – August 2011
Introduction & Review Process
In June 2011 Sleat Community Trust (SCT) commissioned a business review to be carried out which would seek to address the following:
- Facilitate a discussion involving the directors of all boards to ensure a shared overall vision for the next five years to assist in the forward business planning and prioritisation of projects, and to provide an understanding of individuals’ roles and responsibilities.
- Examine the current organisational structure, governance and management procedures and advise on any proposed changes.
- Examine the current financial procedures and advise on any proposed changes with particular reference to VAT and any other statutory obligations including loan repayments, and advise on the investment of profits.
- Examine methods of communication among members of each Board, between different boards, and between SCT and the community, and advise on any proposed changes.
- Examine lines of accountability between employees and the Board to which they are accountable, and communication and lines of accountability between subsidiary boards and the board of SCT.
- Facilitate a discussion about ways of providing volunteering opportunities within the community, to keep people involved and ensure succession.
- Carry out a skills audit among directors, identify any gaps, and advise on how to address the issue.
- Facilitate a discussion about ways of ensuring maximum social impact.
Amanda Bryan from Aigas Associates was contracted through HIE to work with SCT on the review process covering all aspects except from Item 3 which will be undertaken separately by a qualified accountant.
The review process involved a number of activities including; a review of all SCT documentation, telephone/ face-to face interviews with 20 Directors and staff from SCT and its two trading subsidiaries (see Annex 1 for a list of all participants in the process), a skills audit and a meeting involving 13 Directors and staff which took place on Monday 22nd August 2011.
Summarised below are the key findings from the Review Process along with recommendations for next steps.
Sleat Community Trust (SCT) is a community owned and operated company in the Sleat area of Skye which has been in existence since 2004. It is a company limited by guarantee with charitable status with around 450 members (approx. 70% of the local eligible population) and has recently taken ownership of Tormore Forest which comprises 400 ha of predominantly coniferous forest most of which is ready for harvesting. It has two separate trading companies: Sleat Community Trading (SCTCL) which owns a filling station, shop/post office, garage and office accommodation and which also runs a subsidised taxi scheme, and; Sleat Renewables Limited (SRL) which operates a bio fuel business, runs the Clean Sleat initiative, leases and manages Tormore Forest on behalf of SCT and is in the process of developing a wind energy project to provide a source of secure income for the community. In addition to the two trading companies there are also a number of working groups including Tourism, Environment and Media and over 40 individuals are involved in the various companies and working groups. The Trust and its subsidiaries have 4 members of staff – 2 full time and 4 part-time (half of these working for SCTCL). The Trust offices are based in Armadale adjacent to the filling station.
The Trust has achieved a significant amount in its first 7 years of operation and has recently been awarded the Queen’s Award for Voluntary Service. Growth and development has been both planned and opportunistic and the organisation is now at a stage where it needs to ensure that it has the necessary capacity to deliver effectively both its existing commitments and future aspirations.
The business review process has identified a wide range of issues which are addressed in some detail below and due to the nature of this type of review the tendency has been to focus on problems or challenges facing the organisation. However the considerable progress that the Trust has made over the last 7 years and the positive and constructive way in which it operates should be recognised. A summary of some of the strengths and weaknesses of the Trust identified through the consultation are therefore summarised below before the specific points raised in the brief are addressed.Strengths / Weaknesses
- Successful purchase and management of assets.
- Good relationship with Tudor Trust and other funders.
- Widely recognised throughout Scotland as a leader in community development.
- Large number of people involved in running the Trust, its subsidiaries and working groups.
- Working Group structures good at drawing people in.
- Working Groups’ good at developing future Directors.
- Well networked externally – other communities and public sector.
- Good at securing funding from a range of sources.
- Strong technical skills especially in tourism, forestry and renewables.
- Focus on delivery.
- Strong staff team – all highly motivated and professional.
- Significant amount of voluntary effort put in – lots of people who are ‘doers’.
- Good community newsletter and dissemination of information.
- Commercial focus.
- Everyone committed to benefitting the community.
- Some gaps in volunteers from geographic and age group spread.
- Heavy reliance on voluntary input and start of volunteer fatigue.
- Lack of organisational systems and procedures that with growth has meant organisation ‘creaking at the seams’.
- Tension between ‘environment’ and ‘development’ which remains unresolved.
- Reliance on grants to date and need to move to more sustainable income sources.
- Lack of skills in specific areas – finance, HR and legal.
- Internal communications not structured enough.
- Need for greater active community engagement.
- Not enough resources to deliver on aspirations.
- Lack of strategic thinking – focus on day to day.
- Short term finance an issue.
While Sleat Community Trust has a clearly statedpurpose -‘supporting sustainable development in South Skye’- and set of activities that it currently undertakes, working within the objects of the organisation set out in its Memorandum and Articles of Association, it does not as such have a clearly stated overall mission statement or set of objectives. Those activities that have been developed address a range of issues and opportunities identified through a range of community planning events commencing with the work facilitated by CADISPA and set out in the Sleat Community Plan. The focus of interest has been very much on practical achievable things and this has led to concrete results rather than just being a ‘talking shop’ however this has led to a lack of clarity in how the wide range of things that the Trust has taken on holds together as a cohesive whole.Through the consultation process it became clear that while there isn’t an explicitly defined vision or positioning of the Trust the same perception of the Trust’s purpose and role is held by the majority. The following words or phrases were extensively used to describe the Trust.
- Community sustainability
- Providing opportunities for employment
- Providing services where there is a gap
- Community business
- Social Enterprise
- Community benefit
- Improving things across the whole peninsula
- Promote the sustainability and economic development of the area
- Strategic, scale, ambition, sticking power
- Effective delivery mechanism
- Addressing fragmentation across geographical communities and within communities
- Working for the betterment of Sleat
It is important also that the Trust focus’ on what its own purpose is and not confuse that with what the needs of the wider Sleat peninsula are as there are many organisations involved in the latter and SCT is but one organisation serving the wider community’s needs. It is therefore suggested that SCT adopt themission statement and aims set out in the recommendations below, or a variation thereof. These will be further developed through establishing a set of focused 10 year objectives which will drive the prioritisation of activity and the development of a Business Plan. These objectives need to be specific, ambitious but not contentious and focus on what is to be delivered not the mechanism for how they will be achieved although it should be recognised that the Trust is about enabling and facilitating development and not about doing it all itself.V1 / The following should be adopted:
Sleat Community Trust aspires to be a financially sustainable social enterprise working towards the ongoing improvement of the quality of life for residents of the Sleat peninsula through supporting economic development opportunities, the provision of essential services and maintaining the high quality environment. The Trust seeks to work closely with other partners in the public, private and voluntary sectors across the area, facilitating and supporting the actions of others and taking a lead where there is a clear role identified.
The Trust’s activities fall under the following Aims:
- Supporting sustainable economic development opportunities: Through providing a mechanism for local businesses to take collective action and by focussing on making Sleat a good place to do business through addressing issues from provision of business units to finance and ferries.
- Taking care of and utilising the unique local environment: Through recognising that the environment is a unique resource for economic and community activity and ensuring its conservation while utilising aspects of it to develop income generating opportunities.
- Addressing the social needs of the community from housing and transport to caring for our elderly and provision of essential local services.
- Ensuring the Trust and its subsidiaries and working groups are financially self-sustaining, well governed, inclusive, open and accountable to its members.
Organisational Structure and Operations / Accountability
Sleat Community Trust has grown in an organic way from an initially planned beginning, with opportunities such as the purchase of the filling station and garage, operation of the post office and the purchase of Tormore arising due to external factors now dominating the work of the Trust. The Trust has been extremely successful in achieving all that it has but has been reliant on a significant amount of voluntary input and recent growth with the addition of Tormore Forest means that previous ways of working are no longer appropriate and it is widely recognised that there is a need now to consolidate. The following range of issues have been raised through the consultation and review of documentation all of which now need to be addressed – feedback has been grouped under sub-headings as the range of issues is fairly broad.
Day to Day Operations
- Have been reliant on grant from Tudor Trust to meet most overheads and running costs including part time co-ordinator post. This will stop – what next?
- How should overhead costs be split between SCT and the subsidiaries?
- At present there isn’t a source of regular income that could meet some of these costs and it will be some time before the wind turbine income comes on stream.
- Hard copy and electronic records are split between staff and directors home computers and those in the office, there is no networked or central server.
- There is no comprehensive set of documentation for the Trust and no record of what exists in its entirety.
- There is no up to date contacts database maintained of directors, working group members and Trust members.
- Heavily reliant on staff putting in extra hours and significant voluntary input especially from a small number of individuals – this is not sustainable in the long term. Can more be delegated to others to spread the load? Also need to increase staff resource.
- Lack of continuity in SRL – 3 chairs in 18 months and 2 recent resignations. Need to get some continuity.
- Current financial systems are no longer able to cope with the number of transactions and complexity of the business. This will need to be more formally reviewed through support promised by HIE.
- Often reliant on the decisions on external organisations e.g. HC Planners or Roads which can have impact on financial management.
- No risk management or recovery planning process in place.
Board Meetings & Relationships
- Minutes do not adequately summarise discussion and agree actions – this leads to topics being revisited.
- Minutes should be produced immediately after the meeting and circulated within 1 week in order to give people time to move on action points and report back at next meeting.
- Meetings tend to focus on updates and on information from previous month rather than focussing on forward planning.
- Meetings tend to deal with ‘reacting’ to things and there is not enough time set aside for proactive or more strategic discussions in terms of future activity.
- No formal process for agreeing things between meetings.
- Sometimes confusion about who is actually responsible for taking decisions is it the Board (which Board/ WG) or has it been delegated to the staff?
- While information is provided to SCT about the work of the subsidiaries and the working groups, limited information is fed back and there is not a clear sense of collective purpose or activity.
- There is a mixed understanding of what the respective roles and accountability of SCT and the subsidiaries and working groups are – this generally not an issue but there have been some areas of disagreement/ different priorities.
- No clear organisational structure.
- The lack of a formal arrangement between SCT and SRL for the lease/ management/ payment of profits/ staffing related to the forest is not yet a problem but it needs to be resolved. Also need a process for dispute resolution.
- There is a lack of consensus about what any income from Tormore should be re-invested in – back into the Forest, back into the Trust, into the wider community or a combination – who makes this decision?
- All staff are employed/ contracted on a different basis and not all staff have contracts.
- Staff are all managed by different individuals and get a varying level of support and guidance.
- Priorities for work planning tend to be largely set by the staff themselves with the Boards getting updates at varying intervals and depth.
- Staff are all strong self-starters and are able to work with limited support and are all highly thought of but it is recognised that this is taken advantage of and if there were to be a problem at any stage there are not the mechanisms in place to deal with this.
- Basic administrative support is needed to deal with day to day issues in running the businesses collectively.
Planning & Review
- Some concern about a lack of formal planning process – there is a need for the Trust itself to have a Business Plan similar to that for Tormore Forest.
- There is not a consensus about what type of planning process should be undertaken – some want to go back to basics while others feel this would waste time.
- No formal review has been undertaken of the Trust’s activities and this is overdue after 7 years – many other groups do this at 5 years intervals.
- Lack of review means that communication tends to focus on what is happening now and current activity and hasn’t enabled the message to be put out about all that the Trust has achieved.
- No collective view on priorities through something as a plan so decisions are made in isolation.
- Need to take a more strategic approach to managing risk.
In order to address the above a wide range of suggestions were made and these have been fed into the recommendations below:OS1 / IT Systems and Record Keeping: Obtain central server and ensure all computers in office are networked and that remote access to key documents can be obtained by Directors. Establish both electronic and hard copy filing systems and draw together currently dispersed documentation. Develop membership contacts database which meets Trust’s requirements. Approach HIE re potential use of graduate placement scheme which could supply up to 60% of the wage required for a temporary post which could undertake these tasks.
OS2 / Organisational Structure Review:In light of the formal Trust review process,proposed in OS5 below, and in fully considering the current commitments of the Trust an organisational structure review should be undertaken to ensure that it is fit for purpose – this should help establish what the remits of the different subsidiaries and working groups are and the job descriptions and responsibilities of the existing and any potential new staff. Full lines of responsibility and reporting will be set out.
OS3 / Establish HR Systems: Once organisational structure review complete, ensure job descriptions for all posts are in place and suitable contracts in place. Establish appropriate grievance and disciplinary procedures and other HR requirements.
OS4 / Fundraising Activity: There is a need to develop some level of regular fundraising activity which should seek to cover some key core costs. This could include 1-2 fundraising ceilidhs or similar, a lottery or 100 club and perhaps a more significant ‘challenge’ event which could attract visitors to the area – e.g. Cape Wrath Challenge, Great Wilderness Challenge, Highland Cross etc. – this could form part of the Tourism Working Group’s activities as it could become a promotional tool. Consider establishing a Friends group, with annual fee and benefits.
OS5 / Formal Review of SCT Activity: Seek to undertake a review which would pull together all the relevant details of what has been achieved by the Trust and measure this against its original plans. Would also consult with the community about what is viewed as the key achievement and what has worked well and what perhaps need to change. This should be undertaken at the earliest opportunity.
OS6 / Preparation of Business Plan: Once both the formal review and organisational structure review are complete then a new 3-5 years business plan should be developed which will outline what the organisations priorities are and what resources it will need to deliver these. This will include detailed cash flows and balance sheets and can be used to drive fundraising and external funding opportunities.
OS7 / Agree Lease for Tormore Forest, between SCT and SRL: This needs to be agreed as a matter of urgency with the basis for the agreement worked out in a small group involving Directors from SCT and SRL.
OS8 / Restructure Board Agendas: Each board should consider how it operates at its next meeting and reconsider frequency and format of meetings – consideration should be given to agenda setting, balancing needs of managing the day to day operations and forward planning, production of papers in advance, format and distribution of minutes, appointment of minute secretaries.