LGA72 Section 133

Question

Hi All

An odd sort of question regarding Section 133 of the LGA72.

Our Parish Clerk and Chairman are determined to allocate a not so significant amount to the Local Village Hall for repairs to the roof and they want to take funding from our earmarked reserves to do this.

This has a few of us discussing this matter, firstly we do have earmarked reserves, there is no slack in there without removing essentaila funding to other projects, addtionally we had voted to protect these Earmarked items. Ther have been no discussion about having a vote to release any of the ER funding either!

Secondly, our understading is that 133 only applies to buildings WE own, or are owned another parish or community council or provides assistance to another person in obtaining the building or furnishing such a building.

So our concerns are that we suspect public funds are being 'carefully' taken from the Earmarked Reserves (Hiding it in confusion) and that 113 doesn't apply here

For the sake of clarity, we have no responsiblity for the Village Hall, nor does the Parish have competancy.

You quidance would be appreciated

Down_Here

Answer 1

A parish or community council may acquire or provide and furnish buildings to be used for public meetings and assemblies or contribute towards the expenses incurred by any other parish or community council or any other person in acquiring or providing and furnishing such a building.  I don't think such a building must be owned by the Parish Council.   Councils are advised to hold between 3 to 12 months of reserves  (operational cost or pro rata of annual precept). The question is what are the reserves earmarked for, and would the proposal delete them to below three months of normal operational costs?   Your budget should stipulate what they are earmarked for. If not they aren't earmarked.

Comments

Hi Graem_r

We have both General reserves (the six-month operational stuff) and Earmarked Reserves (Neighbourhood Plan, New Street Lighting, etc), so no, the proposed raid is not from General funds

It looks very much that they are planning a raid on the Earmarked reserves, which are project-specific, which we voted to protect!

Answer 2

If you're using the model financial regulations, you need to be aware of the following:-

4.2. No expenditure may be authorised that will exceed the amount provided in the revenue budget for that class of expenditure other than by resolution of the council, or duly delegated committee. During the budget year and with the approval of council having considered fully the implications for public services, unspent and available amounts may be moved to other budget headings or to an earmarked reserve as appropriate (‘virement’).

Furthermore, if you have voted to protect the earmarked reserves and the reserves do not include an allowance for this purpose, you will need to go through the process of voting to unprotect them, with regard to the timescales for reviewing a previous resolution.

I presume that the Village Hall is owned by a not-for-profit organisation and used for public meetings and assemblies?

Comments

Hi Dave

The Village Hall is one of the Charity Commissions Trustee village halls, having been gifted to the Charity Commission back before WWII, so yes an NPF organisation would be the best fit.

The reserves are item/project-specific, however, there is one item that cannot happen now so it means they can release a small amount, not the large amount they are looking at 'raiding'.  The wording on the Agenda is

"to consider and approve an application for a grant of £xxxx as a contribution towards the cost of replacing the roof on the village hall under section 133 of the LGA72 and for the expenditure to come from the Special Project Earmark"

To the best of our knowledge, the VH has not submitted a grant application, nor are there sufficient funds in the Earmarked Funds set aside and we don't own the building.  The other consideration is that the Chairman's wife is one of the trustees of the Village Hall which he is failing to declare publically.

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Does the charity's governing document offer any clues about financial responsibility etc? Have all other sources of funding been explored? The Chairman must declare the interest and if there have been any previous transactions between the two bodies, this should be on the public register already, even though it's non-pecuniary. I encourage all of my councillors to register all of their non-pecs, then they can never be accused of failure to declare.

Might be worth talking to your local ACRE about this, as they should have the expertise on the community building improvement aspect, funding sources and VAT minimisation etc.

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Hi Dave

The first point is he has not declared the interest and on a previous occasion tried to force an unannounced item for funding to the Village Hall, that was stopped when one of the other councillors reminded him that it was neither on the agenda and he had an interest, so could not propose, second or even vote the item!

It is believed that the Governing Documents actually date back to pre-war, so are flaky at best.  They are allowed to borrow, and they are allowed to accept donations.  In the past they did come to the PC for an emergency grant as their drains had collapsed, this was granted under the normal grant scheme.

So this 133 tactic is new to us, so this is why we are suspicious as hell, all we can be sure of is this is not a grant application from the VH, it definitely appears to be something else and to be honest we not only smell a rat, we think the Clerk and the Chairman may be acting ‘outside of the law or ethics’

Answer 3

Applying to the parish council should be a last resort, what fundraising have they done.
Everyone seems to think of the parish council as a cash cow but this is no longer the case.

If you wish to help offer to match fund £1 grant for every £1 they raise but be aware not to commit yourself to something you can’t afford, nobody knows what’s around the corner

Comments

Not a chance on the matched funding, it is believed that the roofing project will be in excess of £50K!!!