CHARITY ISSUE

Question

As some observers on here will know I have for some time been following the actions of two Parish Councillors who are trustees of a charity set up to carry out a specific fund-raising activity for the Parish Council. About a year ago these two Councillors presented to the Annual Parish meeting that they had become involved in a non-Parish Council project which they intended to fund raise for and process the funds through the PC charity. They said this would be achieved by the merging of two charities. This was a lie as the non-PC project was not a charity. Then in order to accommodate the new project and without advising the PC they set about trying to change the objects of the charity but this was refused. Following a conversation with the Charity Commission they received a letter which contained an indication that they could get around their problem by giving themselves a new power and this was to be done by means of a special resolution which could  be implemented by simply sending the copy into the Charity Commission. At this stage they had a power which was out with of the scope of the objects. I presented to the Council saying look they can’t do this whereas the trustees said, “don’t care we have got permission and amended the constitution”.  The Councillors chose to support their colleague.  I complained to the CC who initially said we don’t have the resource to get involved. At my fifth complaint they said “yes you may be strictly right that the new power does not support the objects but it is now part of constitution” and that trumps everything.

This is fundamentally wrong and is an abuse of trustee duties. The PC will no doubt say all charities governance is not our problem , and there is no code of conduct issue. What if anything can I do ..go public ?

Answer 1

I believe you have 4 options!! - because of the funds being processed through the Council [?] Or PC Charity [?]
Sounds like there's be some evidence internally here financially.

Definently look at the Council's Finance Regs.

[Edit - I'm  happy to be corrected by any other fellow Councillors on this site but I think the following apply]

1 Official Complaint to the Town Clerk (email is best) - this would need to be responded to by the Town Clerk. If there is no satisfactory outcome,  you would need to cite that and request it goes to panel.  It would then go to a 'Complaints Panel' which consists of Town/Parish Councillors - there should be a complaints policy online or made available.

You should request a copy of the Scheme of Delegations and Terms of Reference of Full Town Council and / or committe that took this decision IF they are not online within this communication as the Council may have breached it's delegated powers (Common occurence in my Council)
Any evidence of that is in the public interest in my opinion.

2 Go Public- however you would need strong evidence and be weary of accusations being thrown back and be careful of the tone. Keep it factual. You wouldn't actually need to name Cllrs if you reference the resolutions however if this Council is like mine, I'd suggest you save copies of minutes incase they get "pulled" out of the public domain.
Focus on lack of transparency if you do this perhaps?

3.  Go to the monitoring officer but you'd have to name the 2 Councillors and be quite specific. This would be treated as confidential so you couldn't go public during this investigation - [I believe]

You could refference minutes and resolutions, any emails you've received etc.

If you  are dissatisfied with the Monitoring Officer, you then need to go through the complaints process with the district and then, if still dissatisfied,  you go to the LGO (Local Governements Ombusdman).

You would be arguing they are acting in their capacity as a Councillor. You would need to read the Code of Conduct and link this to "The Council"

Note due to Covid , some investigations are being delayed

4. FOI - very carefully worded and very specific. You can access internal emails hence, carefully worded. Ensure you acknowledge GDPR (names may be covered in emails are reports)
At this time, the ICO have accepted FOI's can't be dealt with within the usual time frames. Hence, it'll be delayed. You can ask for finance records, reports within "The Council"
Quite alot to think about there.

Comments

LTN 28 makes it clear that in the case of charities that PCs create to be run by a management committee, the Council has no role in the running of the charity i.e. the role can only be one of assistance . They have no power to intervene/comment
The monitoring officer has opined also that as it relates to trustees any complaint is a matter for the Charity Commission as it concerns behaviour as trustee not a Councillor. Nor is it a matter for the complaints procedure.
The Charity Commission advise that they are not interested in anything other than high risk fraud and one's only recourse is to approach the trustees who of course created the situation
This is just another example of how powerless the electorate is to hold Councils to account.  I believe it leads to charities who survive on Council grants not making sound commercial judgements as they are safe in the knowledge that grants will made as the same Councillors sit on both sides of the equation.

---

Well I sympathise conciderably and can see why you are so frustrated.

---

Thanks welcome to my world. As the Charity involves the local church all recent activity has been carried out during a time when we have had no vicar .  A new one has just been appointed and will now become a trustee.  I have written to him and appraised him of the background and requested that he forms a view. Meanwhile I have a hotline to HMRC and will be writing to my MP . Happy days

---

I have just found out that having been refused permission to change the objects , the trustees created a new power to get around the problem.  Then because the amendments made under the Digital Services  amendment system are not checked by the CC the new power becomes part of the governing document. So we now have a power which does not support the objects.  The Charity Commission is  a joke

---

Meanwhile HMRC who rely on Charity integrity as regulated by the CC before agreeing to pay gift aid are saying if getting around the objects is this easy this could mean that some sort of money laundering could be talking place and we are paying gift aid on it. This issue could yet have legs

---

A couple the contributors are aware of my case which is now being reviewed the Charity Commission . Meanwhile I wrote to the clerk and asked that she gave an opinion . She has not replied . However,  the PC have written to the trustees in a very supportive way and suggesting that they get insured.  They also took the time to thank the trustees for their charitable efforts  and suggested they had spent considerable time trying to dissuade me from my representations when in fact they have never replied to any correspondence.  It seems the PC view is that the means justify the ends. I am now extremely worried re the ability of trustees of PC started charities  to do whatever they want as they are answerable to no one  i.e. they can act with impunity .  Taking this ability to act with no real control  could anyone comment on whether  it is possible for  a PC to undertake a project (and not pay VAT)  and fund arise through a charity (and claim gift aid)  and for that charity to make a grant towards the project .  The more I learn about PC charities and the foundation model the more risks I see

---

Hallelujah  .  I have reached complete and total agreement from the Charity Commission. This now raises the whole subject of how PC manage charities. A good day for accountability