FINANCING COMMUNITY CENTRES/VILLAGE HALLS

Question

My village has recently been to hell and back over the running of its Community Centre.  For many years it was run by a charity which was effectively a sub-committee of the Parish Council i.e. was dominated by a small group of Parish Councillors/Trustees.  Financially the operating shortfall was made good by grant from the PC but was restricted to maintenance works.  About two years ago there was big falling out between the public trustees and the Councillors trustees which led to the former resigning .  Two years on and the public trustees are back but only as  a last resort as nobody else would do the job.  Now this group is well meaning but are faced with the same problems i.e. having to manage a centre that is financially unsustainable. As a group they have their own projects they want to implement but not the revenue to pay for them .

I have therefore suggested that as they are effectively managing agents running a loss making “business” for the Parish Council that they should be compensated/ paid for doing this work ie they should negotiate a deal with the PC for running the Centre. To date I have received a gosh/shock /horror “we can’t do that” response i.e. it is expected that they will do it without compensation .

Could I ask how other Councils “run/support” their loss-making Village Halls/ Community Centres. Are there any which have a customer supplier relationship with the people who run it?

Answer 1

Right at the start of this question you've mentioned that the village hall/community centre is run "by a charity" and that statement is key to what follows.  Charities cannot and never can be "sub-committees of a parish council".  They are separate legal entities in their own right and subject to the rules and regulations of the Charity Commission.  The Trust deed is the governing document and changing a trust deed, whilst possible, is a minefield requiring specialist legal input.  Trustees have legal control and liability for the management of the Trust/charity and cannot offload this to the parish council.  Even in those limited circumstances where parish councils are the sole managing trustee (note trustee, not trustees) - something that the Charity Commission don't like and won't generally agree to these days - the charity is a separate legal entity and must hold meetings etc. and have separate finances from that of the parish council.
In terms of what the parish council can do, if the trust deed permits it, some trustees can be appointed by the parish council and many parish councils grant fund their local community centre to keep it afloat when otherwise it might fold, on the basis that the parish is better off with it than without it.  Advice from somebody like ACRE is usually helpful

Comments

I am fully aware of what the legal status is and also aware of how some such charities act in practice .  What happened was that a group of public trustees resigned in protest at the Councillor trustees behaviour. This was followed by a 18 months period during which  a PC sub committee took over the running of the charity But after a few years battling the public trustees were re-appointed because no-one else would do the job and the PC wanted to get shot of the problem .  But there are always aspects of the Centre which will run at a loss and it is quite difficult to work out the precise amount.   There is of course no incentive for the charity to fund raise as all it does is reduce the loss.
The  question is suppose is how do one calculate the level of grant and what "costs" can  go into it .   I am simply asking whether it could contain a fee for the management function.  I s the answer "whatever you can negotiate".

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I'd suggest that the management group needs to prepare a budget in the same way any other organisation would (basic running costs like utilities, cleaning, insurance etc.), identify the income and work out the shortfall and ask for a grant from the parish council to cover that.  However, all councillor decision making needs to take into account the needs of the parish so I'm tempted to ask what the community centre is used for, by whom etc. etc. as quite frankly, maybe it is not worth supporting.

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Good points Delboy's wife.  The facts are that over the years the PC has created an unsustainable monster which costs money  and expects somebody to manage it for them as it cant do it itself.  Recent events plus Covid have created the perfect storm   As such a fair formula needs to created to reflect this work and any shortfall.  The question is what is fair.   Closing what the PC describes (in its own mind) as the "beating heart of the community"  may make sense financial sense but will never happen

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Delboy  Your approach is IMHO.  Work out the costs in detail, prepare a budget and talk to the council as to how it will work.  The precise amount need time writing in terms of council staff time  which if not available by it being written, estimates will have to do.  Then the council needs to determine the grant.  If the council done want to provide a grant, you need a good risk management plan.  We have a similar issue and the council will hopefully come to the table to consider such issue, though they all feel very sore about it all.  But they asked for a large precept to run the place and got it, so we feel we may have as good as a year to sort it out properly.  They did reject our offer to create such a budget in Dec, as they were still in denial over who owned what, but their legal advice pointed them in the right direction (the first time the council has obtained professional charity advice).