Charity banks more than £300k from Moray tax-payers but fails to pay out a single local grant

A LITTLE known charity that has banked more than £300,000 from investments in tax-payer funded private finance projects in Moray has been criticised for failing to make any grants in the area.

The Hub Community Foundation (HCF) was set-up by the Scottish Government in 2015 and handed lucrative rights to buy investments in private-finance infrastructure projects throughout Scotland. These include Elgin High School and other public buildings in Aberdeenshire, and the Highlands and Islands.

The charity boasts of paying out £2.2m to 10 Scottish projects that “help young people access education and training,” through a programme it calls the Building Brighter Futures Fund.

But no grants at all have been paid out to support young people in Moray, or the Highlands and Islands, despite local taxpayers funding HCF investments in these areas.

Critics have accused the charity of ignoring Moray and the Highlands and Islands and called for it to give local people more of a say over grant making in areas where the charity has investments.

The HCF owned nearly a third of the equity and lucrative loan notes linked to a company which built and operates Elgin High School as part of a private finance deal.

Accounts for the company, called Hub North Scotland (Elgin High School) Limited, show these investments would have earned HCF and its subsidiary investment company a payout of £90,000 in 2022 alone.

In total, it is estimated from corporate filings that the Elgin High School PFI project alone will have paid the charity and its subsidiary company around £342,910 since 2018.

This money is generated entirely from annual tax-payer funded fees paid by Moray Council.

The leader of Moray Council Councillor Kathleen Robertson said she was unaware of the charity’s investments in the high school, adding: “I am disappointed that young people in Moray have had no benefit from a scheme that Moray residents contributed to.”

“I would have expected the Charity to have made local authorities and organisations aware of its grant application processes. I am unaware whether Moray organisations were offered this opportunity.”

It is not the first time the charity has been criticised for failing to consult on its spending priorities. In 2017, MSPs criticised management at the organisation over a lack of transparency. At the time, HCF had no website, and no public contact information. Since then the charity has run one call for applications in 2018 and outsourced grant management to another organisation called Inspiring Scotland.

Following the 2018 call for applications HCF went on to award 10 projects grant funding and it has not supported any other organisations or opened a new round of applications since.

Meanwhile it remains difficult to contact HCF directly. When this paper attempted to contact the charity through its website the advertised email address did not work.

Cllr Robertson said the charity regulator (OSCR) should consider a probe, adding: “If there are concerns around governance, I would expect OSCR to be making the appropriate investigations. I would have hoped that if local taxpayers contributed to these investments that some form of consultation would have taken place to explore what support our young people could have gained through the charity and its obligations.”

Although the Hub Community Foundation has recently announced that it has sold its lucrative investments in the Elgin High School Private Finance Project, its most recent accounts show it still has assets of £4.9m.

The charity has also been linked to investments in similar private finance projects at Wick High School, a school in Oban, health facilities in Inverurie and another in Shetland.

Rhoda Grant, MSP for the Highlands and Islands said: “There is a recurrent theme in that the Highlands and Islands miss out on funding. Sadly this happens far too often and our region gets ignored.

She said the charity should “devolve decision making on funding more locally in order to let people in this area have equality of access to funds".

Bill Mackintosh, chairman of trustees for the Hub Community Foundation, said: "Through a number of different communications channels, in 2018, Inspiring Scotland who manage the fund, advertised the opportunity for local charities to apply for a share of £1.3m of funding from the Building Brighter Futures Fund, established by the Hub Community Foundation.

There were 72 applications received from across Scotland, with two chosen in the “Hub North” area of Scotland, which includes Aberdeen as well as Moray and the Highlands and Islands.

In the “Hub North” area, Mr Mackintosh added: “Aberdeen Foyer and Station House Media Unit were considered to have submitted the best applications and to date, cumulatively they have received over £387,000 to support disadvantaged young people furthest from the labour market to gain skills and confidence to succeed through education, training and employment.”

"Unfortunately given the size of the fund, it is not possible to provide support in every local authority area. The priority has been placed on helping as many young people as possible.”