DCH 286 Action with Communities in Rural England
Somerford Court, Somerford Road, Cirencester, Gloucestershire
GL7 1TW
Tel: 01285 653477, Fax: 01285 654537, Email: acre@acre.org.uk
12 June 2004
Francene Graham
Scrutiny Unit
Committee Office
House of Commons
7 Millbank
London
SW1P 3JA
Dear Sirs
Draft Charities Bill
ACRE is the national association of Rural Community
Councils whose shared purpose is to improve the quality of life
of local communities, and particularly of disadvantaged people,
in rural England. Rural Community Councils are county-based
charities working to promote the welfare of local communities
through voluntary effort and by encouraging people to help themselves.
ACRE supports a national village hall service for
the 8,900 village halls in England. Village halls represent the
largest network of community facilities (apart from Churches)
in rural Britain. Most village halls are managed by recreational
charities with a local management committee that represents user
organisations and members of the general public. It is on behalf
of those charities tat we make this response.
A village hall provides an extremely important resource
for the community it serves, accommodating a wide range of educational,
welfare and sports and leisure activities. Increasingly, with
the demise of post offices and village shops, it is becoming the
base for such services along with part-time doctor's surgeries
and clinics, fulfilling much the same role as community centres
in urban areas.
We comment on the draft Charities Bill as follows
by reference to the section number.
2 We understand that the charitable activities
described in the Recreational Charities Act 1958 were deliberately
not included in subsection (2) and so community centres, village
halls and similar bodies will continue to be charitable under
the 1958 Act. Page 105 of the consultation indicates that the
position with the 1958 Act is still under consideration. We would
welcome official confirmation that the 1958 Act will not be repealed
as a result of the New Bill, and that proper consultation is undertaken
on any subsequent action regarding the 1958 Act.
2(2)(e) The advancement of citizenship and community
development. This is new and raises uncertainties. Section 2(3)(b)
is helpful in explaining what charitable purpose (e) includes
but we feel that it should be expanded to include the promotion
of racial harmony and equality of opportunity.
5 The new s5.1D places the emphasis of the Charity
Commission on the regulatory function rather than on promotion
and making effective the work of charities in meeting the needs
designated by their trusts. (see s.1(4) 1993 Act). This is not
welcome and we believe that the advice giving role of the Commission
is extremely important.
7 This provides (in new s.3A(2)(d)) that charities
with income not exceeding £5000 do not have to register.
The existing requirement that an organisation that uses or occupies
land must register has been removed. We do not accept the reasoning
behind this as it applies to community-owned facilities. Village
Halls Management Committees, as the managing
trustees, may benefit from small gross annual
income, but have responsibility for a significant asset. We believe
that it is important that village halls with security of tenure
should be required to register as charities (whatever their gross
income) to encourage good management and governance of a community-owned
asset. Accordingly, we would like to see the existing requirement
as to use or occupation of land (s.3 (5)(c) of the 1993 Act) stay.
12 We support the relaxing of the strict rules
of cy-pres allowing the commission to take into account the social
and economic circumstances prevailing at the time of the proposed
alteration of the original purposes. We are pleased that under
s.15 (new s.14B) when making a scheme the Commission must have
regard to the matters set out in 14B (3) which include 'social
and economic impact'.
23 In terms of auditing village hall accounts,
the duties of independent examiners as described in 23 (1) (2)
imply a level of knowledge and awareness in overseeing the auditing
function which may cause some difficulties in recruiting suitable
help. We believe that this function is too wide.
Village Hall Management Committees were particularly awaiting
the possibility of being able to convert their village halls to
Charitable Incorporated Organization status in light of the personal
liability of trustees and the increasing move toward social enterprise.
At the moment, there is a lack of clarity about the process for
village halls trusts to transfer to CIO status. The number of
village halls who may wish to convert is therefore unknown, as
is the difficulty any village hall trust may have in converting
from its trust status. With 9,000 village halls in England, this
may mean a considerable workload for the Charity Commission to
undertake. Of significant concern is the need for a membership
structure, in order to convert, which most village halls do not
have.
Our legal adviser makes the following points with regard to the
CIO:
26 It is appreciated that much of the detail
relating to CIOs will be the subject of regulations. However,
we believe that Bill should include two further specific constitutional
requirements:
(a) in new s.69C, a provision similar to s.14
of the Companies Act 1985, namely that the CIO constitution binds
the CIO and its members to the same extent as if they respectively
had been signed by each member, and contained covenants on the
part of each member to observe all the provisions of the constitution.
(b) in new s.69M, provisions similar to ss.15
and 263 of the Companies Act 1985 stating that any provision in
the constitution or any resolution of the CIO to give any person
a right to participate in distribution of profits or assets is
void.
These are important points of principle that should
not be left to regulations.
Additionally, a definition of 'member' should be
included. New Schedule 5A paragraph 9 states that it is the duty
of each member of a CIO (as well as each trustee) to perform his
functions in good faith in such a way as he decides would be most
likely to further the purposes of the CIO. As this is a specific
duty placed on members, it is essential that this duty arises
at a defined point in time, e.g. as in the case of a company,
when the name of the member is entered on the register of members.
30 to 32 We welcome the inclusion these clauses,
particularly the latter, which will be very
useful for village halls governed
by trust deeds who want to make changes to
powers and procedures of an
old trust.
I trust that these comments are helpful. Should
you wish to take up any of the points raised please contact ACRE
at the address on this letter.
YOURS SINCERELY
Deborah Clarke
Village Hall Information Officer
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