Memorandum from Donald Troup, OBE, FRICS,
FAAV (DCH 65)
1. I am a trustee of two Almshouse Charities:
since 1969 of the Richard Watts and City of Rochester Almshouse
Charities (founded 1479) also being a member of its Audit Committee
and the Yalding Almshouse Charities (trustee and treasurer since
1997). I am just retiring after some 16 years as a trustee of
the RICS Benevolent Fund also being a member of its Audit Committee
for 10 years and chairing it for six of those years.
2. In response to the Consultation document
(Private Action, Public Benefit, September 2002), I wrote, by
letter dated 17 December 2002, to the Cabinet Office's Strategic
Unit upon the matters I now raise.
DRAFT CLAUSE
6—CHARITY APPEAL
TRIBUNAL
3. The adoption of this recommendation is
welcome but there are practical difficulties in working the clause
as drafted.
4. The Draft Bill creates the Tribunal,
the way it is to be constituted, its procedures, the remuneration
of members and rights of appeal but there is nothing to define
its terms of reference. Neither Charities nor the Charity Commission
can have any idea what disputes will be referable to the Tribunal.
5. This is a serious omission—it is
not enough to leave things to the production of Rules by the Lord
Chancellor at some unknown future date. There must be enough substance
in the Act itself to enable the Tribunal to be set up and start
operating within say six months of Royal Assent (six months is
surely long enough to identify the Chairman, other members and
their place(s) of work).
6. There are certain disputes, which as
part of its consultation work, the Joint Committee will find can
be immediately identifiable—I mention one specific type
of dispute in more detail below under my submission on Draft Clause
12; this is but one of the whole range of disputes that may arise
from the working of Chapter 4 of the Bill (draft clauses 12-15).
DRAFT CLAUSE
12—APPLICATION OF
THE CY-PRE"S
RULE
7. The introduction of "appropriate
considerations" is welcomed. It has to be accepted that there
can be no objective definition and that subjectivity is inevitable—the
new draft clause 1(a) (b) is clearly a helpful guide. Subjectivity
can be used to produce both positive and negative results depending
whether the aim is to produce modernisation of Charity Schemes
or not. It is this uncertainty that causes great concern and prompt
this submission.
8. It is still the case that, under the
provisions of the Draft Bill, the Charity Commission have the
task of deciding the end result of negotiations since s13 (1)
of the Charities Act 1993 and this is an unamended responsibility.
9. Under present legislation the Charity
Commission adopt a strict interpretation of the original settlor's
intentions. I first experienced this when amending the Watts Charity
scheme in 1977 where no geographic extension was allowed in the
1479 definition and no discretion in respect of appointment to
the Almshouses, nor for Relief in Need. However, in exceptional
circumstances and the trustees making a strong case the Charity
Commission can approve Relief in Sickness outside the geographic
boundary (I accept that its view may well be modified 34 years
later, particularly as the area of benefit applies to part only
of some roads following expansion of the urban area). The strict
application of the cy-pre"s rule was again enforced when
seeking to amend the 1863 Yalding Almshouse Scheme.
10. Yalding Almshouse Charities needed a
new scheme in 1998 to regularise the appointment of Trustees following
the creation of the new parish of Collier Street from part of
Yalding parish. Both parishes are now within the area of benefit
of the Charity. There were no problems about agreeing with all
concerned.
11. The trustees took the view, however,
that some modernisation should also be attempted. Despite considerable
discussion and negotiation a new scheme is about to be approved
but without any modernisation apart from limited additional rights
of discretion.
12. The main change sought by the trustees
was the substitution of the rule that only ladies of over 50 years
who had lived in Yalding for over two years could be appointed
as residents: this was a term imposed 140 years ago by the original
settlors in 1863. The trustees in effect argued, on the grounds
which are neatly summarised in the wording of the new s1(A) (b),
that it was better for the community if married couples or widowed
men living in the parishes could be appointed rather than appoint
ladies from outside the parish with no "Yalding connection";
the idea was rejected because of the strict compliance with the
Charities Act 1993 and the legal cy-pre"s rule.
13. There was one practical question posed
during the discussions that the trustees never had answered: how
long do we have to suffer a reduced income and increased costs
because of empty almshouses (we have only six in any event) before
the Charity Commission accept that the original intention of the
settlor could not be fulfilled and the scheme could be amended
because of that "failure"?
14. The Charity Commission's power to decide
and make a ruling on cy-pre"s issues is not changed under
the draft Bill.
15. Because of the difficulty of applying
subjective concepts to legal decisions I suggest that the Charity
Commission be obligated to produce guidelines for the operation
of this Chapter of the Draft Bill under the terms of the Act.
16. Such guidelines to be prepared as a
draft for approval by (and this is a matter of judgment) either
the Lord Chancellor or the Home Office after a consultation process.
To make this provision would result in clarity for both the Charity
Commission itself and for charities seeking an amendment of an
existing scheme and an avoidance of both frustration and time
wasting for everyone.
17. In 1976 at the time of the introduction
of the Tied Cottage legislation (the Rent (Agriculture) Act 1976)
it was decided to help everyone involved interpret the subjective
concept of the "needs of agriculture" when a farmer
required possession of a cottage for another workman. I represented
the rural surveying profession in agreeing the wording of these
guidelines with MAFF, as it then was. The absence of so few cases
of litigation to resolve disputes in more than 25 years is, to
me, a good reason for adopting the same idea now. These particular
guidelines have actually stood the test of time unaltered.
18. I urge the Joint Committee to adopt
this suggestion of published guidelines being prepared. In view
of my experience I do not accept that guidelines would result
in restrictive view, in any event there would be nothing to prevent
new "improved" editions being prepared and published
if the need arose.
DRAFT CLAUSES
22 AND 23—ANNUAL
AUDIT OR
EXAMINATION
19. As noted in my introduction I have experience
of Audit Committee work for two charities. I am also appointed
Independent Examiner for a Parochial Church Council.
20. The proposed changes, which differ from
the Strategic Unit's original suggestion is now realistic and
workable.
21. While it may be argued that the £250,000
income and £2.8 million level of assets is too high it is
a practical compromise and I urge the Joint Committee to reject
totally arguments in favour of raising these thresholds, particularly
as the trustees' power, under s43 (3) of the Charities Act 1993,
to choose between having an audit or an independent examination
is unchanged.
22. Draft Clause 23 which introduces new
s44A is welcome and seems to be in line with the Charity Commission's
existing advice.
CLARIFICATION OR
FURTHER HELP
23. I will be pleased to help in any way
best suited to the needs of the Joint Committee by clarification
of these submissions.
June 2004
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