The ethics of asking for donations to the council as a result of poor financial planning.

Question

In my parish council I'm worried about the ethics of a cllr asking the village hall committee, on which he also stands, to donate about £2000 for a field fencing upgrade that's the responsibility of the council. My worry is that the upgrade has been requested by the family who use the field for grazing ( zero rent)  otherwise it doesn't need real upgrading at all. Other Cllrs say it's ok as it's for the benefit of the parish - we'd have to pay for mowing. I see it as a large benefit for the family. The council has very little money as it refuses to plan financially more than 12 months ahead. Meanwhile it doesn't have enough money for other essential war memorial repair, which is overdue. It keeps running down it's reserves to cope. Would this be considered as financial mismanagement or am I just being too precious? Shouldn't the clerk get a grip?

Answer 1

It all depends on the ownership of the land and the agreement of tenancy (whether rent free or not) .Firstly a councillor cannot ask in their capacity for donations from anyone. This would be a matter for the whole council to decide to do. He should not be involved as he has a position on the village hall committee and has a foot in both camps as it were. You don't say why the council is responsible for the upgrade which would help clarify the situation or whether the request by the occupier has any legal basis or obligation by the council to fulfil.

If the council does indeed have responsibility for maintenance of the fencing then it is part of their financial planning to allow for such maintenance in annual budgets. Not planning for more that one year is contrary to the required necessity for a 3 year budget forecast when requesting precept  for the council especially if the funds in the council are low and projects or liabilities cannot be accommodated in a single year.

It certainly appears on the surface that the council is not meeting their obligations for fiscal prudence

Comments

Councils should seek to generate a return from their assets, so if you have land available, it should be the subject of a formal tenancy agreement and a market value rent. Such an agreement would place the responsibility for boundary maintenance with the tenant. In effect, you are currently asking your council tax payers to make a financial contribution to the family who use the field.

I hope your village hall committee has declined the request for payment, as they may be operating outside their powers in making a contribution. Is there any legal basis for asking them to contribute?

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Very big thanks for both replies. Any decision will not be made until this Wednesday. I'm somewhat relieved to receive your advice as I'm a lone voice on this. Re the lease, the council leases from the church authorities for about £200/annum. It's very restrictive. We can't underlet it without permission and we are responsible for repair of fences, hedges, drains etc. It can be used for recreational purposes and for the one day summer fayre (provide no rent is charged). The family who use it for grazing agree to mow the grass as and when needed in kind. Nothing more. No money is involved. We have no income at all other than from the precept. Frankly the whole thing stinks, in my view, but as a Cllr of only one year standing I'm not yet knowledgeable enough to combat successfully the onslaught I'll get at the upcoming meeting. The other Cllrs already know my concerns in detail and have batted them away in email exchanges, so I reckon they'll be content just to outvote me. (Maybe I should have a not very quiet word with the Clerk beforehand.) Stormy weather ahead.

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The question is of course why do the PC lease this piece of land and who gives permission for its use for grazing. Are the required repairs due to having to enclose stock properly or people, Is the grazing allowed by the council to get it mowed "on the cheap" . All a minefield that the council can find themselves in through possible lack of financial planning. Where does the £200 rent come from? All should be made crystal clear before undertakings like this are embarked upon. If it is an "historic" arrangement then it should be brought into the 21st century and insured correctly. Most church leases are short term roll overs so the remedy may be easily sorted.

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So you're paying £200 a year out of the precept for a field you don't need, then giving it rent free to a local family.  Parish councils do not have the legal power to give money to individuals or to incur expenditure on their behalf.  You're now considering expenditure of several thousand pounds to improve an asset you do not own, merely because your tenant has requested it.  For reasons that are not immediately clear, you are asking your village hall committee to invest this sum.  If your village hall is a registered charity, this would be a breach of charity finance regulations, unless the charity's governing document included the field as part of the charity's financial responsibilities.

Option A - tell the tenant that if they want a better fence, they should provide one.
Option B - give the land back to the church authorities.

On the wider issue of financial management, start planning next year's budget now.  Draw up a wish list and attach reasonable cost estimates to every item.  Add these sums to your known regular expenditure and you have a precept figure.  Simples!

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Yes, that's exactly the situation! I have suggested we end the lease (nenewed annually) but that didn't find favour. Apparently 'the village wouldn't like it.' And no, I don't understand what that means. I feel I'm  living in an alternative universe on this issue. Maybe I am- eat your heart out, Elon Musk. The village hall is a charity so thanks for the ammunition that gives me. I may be new, but I'm  quite good at stamping my feet.

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The village might like it a little more if they found out how much it's likely to cost them!  Enjoy your stamp!

Answer 2

Baaaad management (On the surface at least). I ask the full council the following question...

"If we didn't lease the land free to this family then where would they graze their animals?"

I would imagine if they don't have their own land then they would have to look for alternative arrangement privately that would likely result in them having to pay rent. The land is a valuable asset and to be given away free in this type of example is a poor use of council/public asset.

I do not agree that this arrangement is in the publics best interests at all. Should the land be leased for free then it should at the very least be on a 'rolling repair' tenancy whereby the tenant is responsible for all upkeeping and maintenance.

I am surprised that your auditors are not more influential in changing this.

Village Hall committees quite often look to the council for support and not the other way around so in itself that is quite questionable. I sincerely hope they have refused the request. If the Cllr who is on both parties doesn't declare his interests then that is a seperate legal matter to look in to.

Yikes, good look with this one!!

Comments

Actually the family do have alternative possibilities for grazing, it seems, and the worry is that no others would want to take on our field, which makes it not too much of an asset for the council.  I'm pushing to give up the lease, as it's a waste of resources that we don't even have. Seems obvious to me, given the advice on here :)

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Definitely think it's obvious. Is the field within the greenbelt area? Could it not be used for a better purpose with funding? Maybe allotments?

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It's in an AONB, but the lease is extremely restrictive, no matter what funding is available. In turn this means if the church authorities lease to someone else, it'll be equally restrictive i.e. no chance of it becoming something that villagers would really disapprove of. It's not for sale either (we've asked) and now looking at getting it assigned as an asset
of community value.

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Sorry I just read back and saw the bit about the church. To me its super straight forward. Either the church pays for the fence or the family leasing it does. If neither party wants to pay it gets left.
As a member of the tax paying public in your area I would absolutely protest at the fact public money is being used to lease a field from the church and then sub-let for nothing. Crazy.

Answer 3

The Council has the power to set the precept at whatever level it wishes and to spend it on whatever they feel is appropriate for the parish if they have secured the General Power of competence. If it feels the field fencing is in need of upgrading it should be financing it through the precept or from a grant.  The Clerk is not empowered to "get a grip" and is there to act on the wishes of the Councillors.