Birlinn pocketed up to £43k EXCESS profit for the Muriel Spark Centenary project fronted by Nicola Sturgeon, Scotland’s First Minister.
Fiona Hyslop MSP, who was Cabinet Secretary at the time, has refused to recover the public funds lost as a result of SBT’s deception.
Scotland’s charity regulator, Scottish Government-funded OSCR, has also refused to act against Scottish Government-funded SBT’s trustees or CEO.
Muriel Spark Centenary
In November 2018, Scotland’s First Minister Nicola Sturgeon announced that Scottish Book Trust (SBT) would donate to Scotland’s libraries 11,000 Birlinn/Polygon centenary editions of the Muriel Spark novels that Scottish Government agency Creative Scotland had already given Birlinn a £45k grant to produce. The £90k ‘donation’ project was to be funded equally by ScotGov and Postcode Culture Trust (PCT). According to Fiona Hyslop MSP, SBT was charged with negotiating a deal with Birlinn.
However, SBT’s CEO, Marc Lambert, didn’t disclose to ScotGov or PCT, or to SBT’s trustees, that he was a business partner of Birlinn. Rather than allow others to judge how the resulting conflict of interest (COI) could be managed, he decided that none existed and did not disclose the business partnership.
Birlinn and Marc Lambert: business partners
In 2016, Marc Lambert acquired 15% of publisher Nicolson Digital Limited, of which he is a director. Birlinn owned 42.5% until it transferred ownership to Hugh Andrew – Birlinn’s sole shareholder – in September 2020. When the Muriel Spark deal was ‘negotiated’, Marc Lambert and Birlinn controlled 57.5% of Nicolson Digital, which relies on Birlinn for sales, distribution and a material amount of lending.
Hugh Andrew approved Marc Lambert’s appointment as a Nicolson Digital director. However, that approval was hidden from Companies House for 9 months after being given.
Marc Lambert has a statutory (Companies Act) fiduciary duty to Nicolson Digital as one of its directors; whereas he has a contractual (contract of employment) duty to SBT because he is not a director or trustee of the charitable company. Put crudely, he owes a greater duty to Nicolson Digital than to SBT; and, through Nicolson Digital, he is obliged to look after the interests of its shareholders, including himself and Birlinn.
Marc Lambert should have declared his interest to ScotGov, PCT and the SBT board and allowed them to determine how to proceed.
SBT hadn’t ‘negotiated’ deal it claimed
A Freedom of Information request has revealed how, and to what extent, Birlinn benefited from the deal SBT ‘negotiated’ under the leadership of Marc Lambert.
The highlighted section below evidences what ScotGov was told had been negotiated.
£156 versus £200 RRP is 22% discount off RRP, not 33%.
SBT made the same misrepresentation in its application to Postcode EqualityTrust, stating:
‘SBT has negotiated a 33% discount on the Muriel Spark Centenary Editions with the publisher [Birlinn]. Each set will cost £156 (£200 RRP). As mentioned, Alan Taylor’s memoir will be supplied free of charge.’
Below is an extract from the application (highlighting is ours):
What Marc Lambert told SBT’s trustees
When OSCR was alerted to the misrepresentation, SBT’s trustees finally agreed to investigate.
SBT’s subsequent response to OSCR stated that a 22% discount had been agreed with Birlinn, i.e., not the 33% claimed by Marc Lambert; and certainly not a normal commercial discount.
Hardly a surprise given that OSCR had received the documents that made clear the misrepresentation.
What was new was the explanation provided by the trustees. Their report to OSCR made the remarkable claims a) that 22% was Birlinn’s ‘standard’ publisher discount and b) that it was what an independent bookshop would have received.
The reality: 35% is the minimum discount such a shop receives on a single copy of a book. Larger retailers and wholesalers receive 40-50%, while Amazon requires a 60% for its Advantage program. So, why did the trustees make their remarkable claim? Were they repeating, unchallenged, what Marc Lambert had told them? Did they not check what a typical discount would be, e.g., for all the other books SBT buys? Or did they know that their claims, like Marc Lambert’s, misrepresented reality but feel certain that OSCR would accept them regardless? Did the trustees write the report, or did Marc Lambert?
In an attempt to justify the incredibly high price agreed with Birlinn, the report states that Scottish Government ‘instructed’ SBT to buy Birlinn’s books. The implication is that SBT was told what price to accept, which contradicts Fiona Hyslop’s statement that all commercial aspects of the project were the responsibility of SBT, not ScotGov.
Remember, SBT applied for the £90k funding for the project (£45k each from ScotGov and PCT) after first seeking a quote from Birlinn then accepting the hugely inflated price (i.e., incredibly low 19.7% discount) from Marc Lambert’s business partner, Birlinn.
So, who is telling the truth? Did ScotGov tell SBT what it was to give Birlinn? Or did SB make no attempt to negotiate a commercial price with Birlinn because the company was Marc Lambert’s business partner and run by his friend?
Trustees did not know of Marc Lambert’s partnership with Birlinn
The report states that Marc Lambert acknowledges that it might have been an idea to have disclosed his business partnerships with Birlinn when supposedly negotiating a £90k deal with the company.
What action has OSCR taken?
Yes, we find that remarkable and disturbing too.
Like SBT, OSCR is entirely funded by Scottish Government.
What action have SBT’s trustees taken re the Muriel Spark deal?
They have allowed Birlinn to retain all of the excess profit it obtained via the deal accepted by its business partner Marc Lambert.
They have allowed Marc Lambert to remain CEO of SBT.
They have allowed Marc Lambert to remain a business partner of Birlinn’s owner.
Going forward, they have asked staff to inform the charity of additional potential conflicts of interest. (Internal documents show that they felt they needed to offer OSCR something.)
What action has Scottish Government taken?
Since she stated that all the commercial aspects had been the responsibility of SBT, one might have thought that Fiona Hyslop MSP would have been angry when alerted that ScotGov and PCT had been duped into paying massively over the odds for Birlinn’s books. Not at all. She refused to take any action over the matter. No recover of funds from ScotGov-funded SBT.
How much has the conflict of interest cost ScotGov (taxpayers) & PCT?
Had SBT negotiated a 60% discount, Birlinn would have received £43,295 less from the deal.