£30,000 grant (under s.137 LGA?) to fund church refurbishment?

Question

Hi!

Google found me here, with much the same question as above!   Our local council is Ludlow Town Council (Private Eye, ad nauseam!)

Council members have just granted £27,000 of our £330,000 precept to the parish church (£9k to be given to the church in each of the next three years).

See: http://www.ludlowadvertiser.co.uk/news/10758119.print/

The money will reportedly help fund "a major refurbishment project" in the church, "starting with a new heating system".

This £27k award was apparently made by way of a s.137 grant under the Local Government Act 1972.  Although, as yet, nothing is minuted to confirm that.

A number of us are unhappy with this funding allocation.

The parish church is strictly a place of worship. It is not available for hire or for general community use, and it has no attached hall. Further, the parish church is just one of several buildings in the community used for religious worship. Why should it be favoured over other denominations?  For this reason, it seems wrong for the award to have been granted at all.  It discriminates on the grounds of religion.

Secondly, public finances here are already very tight, and with worse to come. The former town clerk has just won her constructive dismissal claim against the Council, and must be compensated for "substantial losses in salary and pension".   Meaning even less public money for s.137 awards:

http://www.shropshirestar.com/news/2013/12/03/former-ludlow-town-clerk-wins-her-unfair-dismissal-fight/

And yet, at the same time, other, arguably more worthy appeals for s.137 grant funding are being rejected en totale, or else greatly scaled-down.

The Council has a roll of ~6,000 electors.  The limit of S.137 expenditure for this year is therefore ~£42,000 (just under £7 per head).   Is an annual £9k grant for a church refurb project commensurate with that limit?

The National Association of Local Councils (NALC) has published Legal Topic Note (LTN31) offering advice on the use of s.137 grant-giving powers:

http://www.yorkshirelca.gov.uk/YLCA-Web/UserFiles/Files/NALC/NALC%20Legal%20Topic%20Notes/LTN31%20Section%20137%20of%20the%20Local%20Government%20Act%201972%20August%202013.pdf

NALC cautions that the expenditure should be "commensurate with the local benefit".    And the grant must be "in the interest of, and will bring direct benefit to, the area, or any part of it, or all or some of its inhabitants."

Does an award for repairs, or even just refurbishment, of a church fit those legal criteria?  If so, why are s.137 grants to churches so uncommon?

I can find just one other example:

http://www.breagepc.org.uk/minutes/211113.pdf

The council in that case (Breage PC in Cornwall) was clearly uncomfortable with the S.137 request for funding to repair the leaking roof of its local Methodist Chapel Hall.   Before agreeing to a grant of £1,298, the clerk sought advice from the Cornwall ALC.

The ALC advised that a S.137 grant, in that case, was permissible "as [the hall] is a separate room not used for worship and provides community facilities."

That, however, is not the case with the parish church in Ludlow.   It is solely a place of worship, and does not provide community facilities.

Any suggestions greatly appreciated.   Especially any advice on broaching the subject with an historically very confrontational council!

Thank you for your time!

Answer 1

Certainly sounds contentious!

I don't think it is difficult to argue that the expenditure is "in the interest of, and will bring direct benefit to, the area, or any part of it, or all or some of its inhabitants.".  This part of the legislation is designed to prevent parish councils from paying for things that aren't directly relevant to the parish.

The difficult part is to justify the expenditure being "commensurate with the local benefit" and the legislation here is very much subject to interpretation.  Benefits cannot be measured in cash terms, so that although extreme cases may be obvious, it is often hard to say whether the benefit is commensurate.

The arguments you put against the expenditure are perfectly reasonable.  I'm making no judgement here, but one could argue in support of the expenditure as follows.  Parish churches are different from other places of worship in being part of the traditional fabric of society.  Many of them are older than the Church of England, and they have obligations to all parishioners, whether or not parishioners choose to exercise their rights.  Many parish churches are of architectural merit and form an important part of the built environment.  Traditionally, the Church of England has been able to maintain parish churches through a combination of its assets and the support of active members.  Both of these sources of funding have been in steady decline for some time, and so  if parish churches are to be preserved, the cost of maintaining them is bound to fall more widely, probably through public authorities of some kind.  Some of these factors would apply to other churches, depending on the exact circumstances.

In short, I can see arguments on both sides, and which side is stronger is a matter of individual judgement.  Given that degree of uncertainty, my feeling is that it would be hard to establish that the expenditure definitely fails the vague criterion of being commensurate with the benefit.  Of course the matter could be taken to court and decided by a judge; again my guess (and that's all it is) would be that the judge would decide that there was no overriding reason to take the decision away from the town council.

Comments

It is ironic that I was this morning writing to my PC about some s137 expenditure which in my case is a bit more black and white i.e. to be spent objecting to a planning matter.   What I am coming up against is the decision to spend under  S137 is a matter for Councillors alone. Whether the spend brings subsequent benefit is irrelevant ie they believed it would . The rider that is added (LTN31 para 8) is that the decision can be challenged via the external auditor if a resident deems the spend as "wholly unreasonable".
Does anyone have any experience of how "wholly unreasonable" can be defined
PS I understand that all S137 spend has to passed by means of a resolution

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Well, councillors can't be expected to know the future! So it is always possible that benefits don't turn out as expected. But certainly you are right to indicate that a decision must be reasonable. Sorry, I don't have experience of this being defined, but I don't think you will go far wrong if you assume that a court would use the test of "would the average person think this is reasonable".

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My previous experience determines that with most legalisation involving local authorities usually has some sort of legal test. (annoyingly it usually involves the words “be satisfied”)
In this case LTN 31 I believe puts its succinctly
The council must first be satisfied that there is a direct benefit to the area or part of the area, or to some or all of the inhabitants. The council is the body to determine whether or not such benefit will accrue, and a decision by the council could only be challenged on the ground that it was wholly unreasonable.
So the legal test is that you are satisfied that your expenditure will bring a  direct benefit to the area. You cannot make that guarantee in a civil case in which you may lose. Therefore your decision is wholly unreasonable.
As far as I am concerned to spend money on a civil action in which the decision can go either way means that  if a Council resolves that they are satisfied there will be a direct benefit  then that decision is wholly unreasonable

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Well, it's an interesting argument! It's rare for a local council to instigate litigation - it's more often the defendant. And apart from employment tribunals, that is rare too, partly because of the high cost. I'm not sure I'd accept your argument as decisive. If a council believed it had a good case, then I don't think the inevitable uncertainty automatically rules out a decision to proceed. It might well be deemed to be in the interests of citizens to try to achieve a result, even without any certainty it will be achieved. That certainly doesn't sound wholly unreasonable to me. Although, once again the high cost of legal action comes into play, so the potential benefit would need to be considerable.

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What I am trying to get my head around is that there is distinct difference between a legal process which involves a prosecution or a defence which involves the PC itself and a planning inquiry which essentially involves a dispute between the applicant and an objector at which an Inspector is being asked to adjudicate .  I think some clarification is needed so I have written to the external auditors to see what they have to say.  I recall asking someone in the past as to what a direct benefit was (as opposed to indirect) but cant remember the answer

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Often there is no answer to questions about what the legislation means. Other than that it means what it says! You may be able to find opinions as to what it means, but that is all. The only time more is available than you can get simply by reading the legislation and taking account of how words are typically used in legislation is when there has been a court ruling. But many questions have never been taken to court.

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I still reckon that s222 is appropriate
Where a local authority consider it expedient for the promotion or protection of the interests of the inhabitants of their area—
(a)they may prosecute or defend or appear in any legal proceedings and, in the case of civil proceedings, may institute them in their own name, and
(b)they may, in their own name, make representations in the interests of the inhabitants at any public inquiry held by or on behalf of any Minister or public body under any enactment.