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April 21, 2016updated 22 Apr 2016 2:30pm

Guardian-owning Scott Trust faces challenge from journalists over losses, governance and redundancies

By Dominic Ponsford

Former Guardian editor Alan Rusbridger is set to face challenging questions from journalists at the paper when he steps into in his new role as chairman of the paper's owner – the Scott Trust.

Five Guardian journalists are in the running to be the staff representative on the trust and at least two of them have made forthright criticism of the way the title has been run.

Some Guardian staffers believe that editorial expansion (into the US and Australia) in recent years laid the ground for the paper to make an operating loss of £58.6m last year and for its savings to reduce by more than £100m. Rusbridger stepped down as editor in May 2015 handing over to Katharine Viner. He is set to take over as chairman of the Scott Trust this summer.

In the year to the end of March 2015, Rusbridger's last full year in charge as Guardian News and Media editor in chief, the paper reported underlying losses of £19.1m, which – with £838m in the bank  – were seen at the time as being sustainable.

Hustings were due to be held today for the staff representatives seeking election to the Scott Trust board (see update below for report from hustings).

Columnist Polly Toynbee, cartoonist Steve Bell, Guardian economics correspondent Phillip Inman, Guardian financial editor Nils Pratley and the paper's defence and intelligence correspondent Ewan MacAskill are in the running for a position on the body, which meets four times a year.

In his election address Pratley raised concerns about operating losses for the paper of £300m over the past decade and "cash outflow" of £80m in the past 12 months.

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And he said: "I share the concerns, aired in the recent staff and chapel meetings, about accountability on the Scott Trust's board. Standard principles of good governance have not been followed and shortcomings need to be addressed."

Pratley declined to comment further on this, but Press Gazette understands that some staff are concerned about Rusbridger moving from editor to Scott Trust chairman.

MacAskill said in his election statement: "I am gobsmacked that we went through a painful round of redundancies in 2012, reducing the editorial staff to 500, only to take on another 450 and now beginning another round of cuts. How did we end up in this mess? And how are we going to get out of it?

"We have a £740m pot, with another £200m still be to added, and we cannot allow that to be squandered."

As of last year, Guardian News and Media had 968 people defined by the company as "core editorial staff". The £200m MacAskill mentions may be a reference to the profit Guardian Media Group could make from the sale of its stake in Ascential (formerly Emap).

MacAskill also talks in his address about "tough decisions ahead" which include the possible "eventual phasing-out of the paper, with maybe only the Saturday Guardian and the Observer left". And he talked about the search for a new business model: "…a paywall that is not called a paywall, new deals with Facebook, philanthropists, crowdfunding and the creeping growth of native advertising".

MacAskill said there is also the "hint of a move towards compulsory redundancies for UK staff hovering in the distance that would require to be met with fierce resistance".

Guardian Media Group said last month that it is looking to cut 100 editorial jobs.

Beth Rigby in The Times reported staff "anger" over Rusbridger's return as Scott Trust chairman.

One un-named insider told the paper: "Stepping down as chief executive and becoming chairman is something that is not approved of in business management and you can see why, because in effect Alan is going to become Kath Viner’s boss when she is reversing some of the decisions he made.

"It is ludicrous. It is an unsustainable relationship with him as chairman and Kath as editor. It is not going to prosper in these circumstances."

The Scott Trust's main remit is to protect the journalism of The Guardian, it also approves Guardian Media Group's business plan. It is far less directly involved in the running of the business than the Guardian Media Group board.

UPDATE: 22/4/20165

Guardian poliitical reporter Michael White, who chaired the Scott Trust election hustings, spoke to Press Gazette after the meeting. He said: "Staff had a constructive 90-minute session today with the five colleagues seeking to become their next representative on the Scott Trust.

"Everyone is aware of the financial challenges which the paper, like most of its rivals, faces in search for online revenue and of the need for economies. Contrary to some of the advance publicity there was little recrimination. Editorial staff are focussed on protecting the Guardian's future."
The Times reported in advance of the meeting that "tensions" were expected and indicated that these were expected to be directed at Rusbridger. Asked about this, White said: "There was some concern that a promising financial scenario had deteriorated so quickly in 2015 to the benefit of Facebook and Google. But that concern was not confined to individuals or to Alan Rusbridger."

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