Co-Operative Oldham Fund - Bringing Dormant and Under Used Charitable Funds Into Use

CABINET

Co-operative Oldham Fund - Bringing Dormant and Under Used Charitable Funds into Use

Report of: The Borough Treasurer and the Deputy Chief Executive

Portfolio Responsibility: Cllr Abdul Jabbar - Finance, Human Resources and Strategic Partnerships Cllr Barbara Brownridge – Co-operatives and Community Development 28 January 2013

Officer Contacts: Anne Ryans and Jackie Wilson Ext. 4902/5755

Purpose of report

To present issues and options to Cabinet in respect of the potential forward use of dormant or under-used charitable trust funds and the establishment, management and operation of a sustainable Co-operative Oldham Fund.

The report sets out detailed work and consultations undertaken in respect of identifying such funds and makes detailed recommendations on their future use.

Executive Summary This report sets out the issues and options regarding the use of dormant or under used funds for which the Council is a sole Trustee or Custodian Trustee. Total resources within these funds are £1,575,769.

The report also sets out proposals for the development of a sustainable Co-operative Oldham Fund and how this could be established and sustained by the use of dormant trust funds, Council funds initially allocated for a Community Dividend Fund, income from fundraising by Voluntary Action Oldham and other income.

Appended to the report is detailed information on the current position of some of the funds held by the Council and suggests options for the future use of the funds. The recommended approach for the funds is set out in the following table:

Recommended Use of Dormant/Under Used Funds £ £

Transfer to the Oldham Fund - proceeds of 41 charities with objectives that can no longer be 587,282 fulfilled - proceeds of 11 funds with no known Trustees 59,204 - proceeds of 3 other charities for which OMBC is the Trustee 10,535 Total Funds to be Transferred to the Co -operative Oldham 657,021 Fund

Other Funds to be Wound up or Transferred away from the Administration of the Council - transfer 35 funds or Trusteeship to relevant school or college 73,686 - transfer to Hathershaw School to address the requirements of 3,000 the John Armitage Fund - wind up and transfer to other organisations reflecting the 53,295 fund’s intended usage - merger of one fund with an existing charity and transfer the 718,270 administration of the remaining three funds to Trustees Total Other Funds to be Transferred from the 848,251 administration of the Council

Charitable funds for which no Change is Currently Proposed - Clayton Playing Field Charity 54,500 - Hopwood Trust 733 - Oldham Mayor’s International Disaster Fund 15,264 Total Charitable funds for which no Change is Proposed 70,497 TOTAL FUNDS 1,575,769

There is also a recommended way forward for the operation of the Co-operative Oldham Fund using £657,021 of the released dormant funds and £250,000 of Council resources set aside as a commitment to the Co-operative agenda. It is proposed that a new Fund with resources of £907,021 is created and managed by an external, existing organisation with Charitable Trust status and that this should be Voluntary Action Oldham (VAO). This recommendation is on the basis that VAO is uniquely placed to deliver the Councils requirements. It is planned that, subject to approval of the principles establishing the Fund and its governance arrangements, the new Fund is launched on 14 th February 2013 and that work to finalise its governance arrangements will take place to ensure that all the resources allocated to the Fund are utilised appropriately.

Page 2 of 30 [Charities Report] January 2013 Recommendations That Cabinet considers the paper and approves:

a) The approach recommended for each of the funds as set out in detail at sections 3.3 to 3.16 of the report and the table in the Executive Summary above.

b) The approach to the creation of the Co-operative Oldham Fund and the utilisation of £657,021 of charitable resources and £250,000 of Council resources in the initial start-up of the Fund.

c) The management of the Co-operative Oldham Fund by Voluntary Action Oldham.

d) Delegated authority for Cllr Brownridge, Cllr Jabbar and Cllr Stretton to approve the finalisation of the governance agreement, including financial arrangements and safeguards, of the Co-operative Oldham Fund in accordance with the principles established in the report.

Page 3 of 30 [Charities Report] January 2013 Cabinet 28 th January 2013

Co-operative Oldham Fund - Bringing Dormant and Under Used Charitable Funds into Use

Report of: The Borough Treasurer and the Deputy Chief Executive

Portfolio Responsibility: Cllr Abdul Jabbar - Finance, Human Resources and Strategic Partnerships Cllr Barbara Brownridge – Co-operatives and Community Development

1 Purpose of report 1.1 The report outlines options as to how dormant and under used charitable Trust Funds totalling £1,575,769 for which the Council is the sole Trustee or Custodian Trustee could be brought into use and/or distributed within the borough.

1.2 The report also sets out proposals for the establishment, management and operation of a sustainable Co-operative Oldham Fund and how this could use dormant trust funds, Council funds initially allocated for a Community Dividend Fund, income from fundraising by Voluntary Action Oldham and other income.

2 Background

The Review of Charitable Funds

2.1 This report sets out proposals for the future management of a number of charitable funds for which the Council is responsible but which have become dormant or are under used and for the development of a Co-operative Oldham Fund. It is informed by a review of the funds, the aim of which was to examine options for the effective utilisation of charitable funds administered by the Council.

2.2 A steering group was established to look at the options to best utilise the charitable funds and to take this process forward within the Council. The recommendations in this report are based on the findings of the review and after discussions with the Charity Commission (see paragraphs 3.17 to 3.19 for detail). The Council does have to have regard to its responsibilities for the administration of the funds in considering proposals.

The Responsibilities of the Council for the administration of Charitable Funds

2.3 The Council has a responsibility as either sole trustee or custodian trustee of charitable funds to manage them effectively and efficiently. A Charity exists in law, by virtue of its’ charitable purposes, even if it is not registered with the

Page 4 of 30 [Charities Report] January 2013 Charity Commission so Charity Law applies to all the 85 Oldham charities and 13 funds included within the scope of this report, whether registered or not. Discussions have taken place with the Charity Commission about proposals contained in this report and it will support any initiative that results in unused charitable funds being used lawfully.

2.4 The charities have a governing document of some form which lays out the constitution or rules of the charity. This includes the objects and purposes of the charity. The majority of the charities hold permanent endowment funds. The Trustees cannot normally spend permanent endowments unless the governing document specifically states otherwise.

2.5 The Charities Act 1993 (as amended by the Charities Act 2006) lays out the statutory powers trustees have to transfer and/or spend that permanent endowment and the circumstances under which this would be appropriate even if the governing document does not give these powers. It also gives trustees the power to change the objectives of the charity. This is the legislation that will be utilised if the recommended approach set out in this report is agreed.

The Development of a Co-operative Oldham Fund 2.6 This review of charitable funds was one of a number of strands of work being undertaken, which taken together; presented the opportunity to establish a sustainable fund to support the delivery of the Co-operative Oldham ambition through the giving of grants and loans to individuals and groups. The other strands are: • Consideration of the best use of the £250,000 which the Council has allocated on a one off basis as part of its commitment to the Co- operative agenda. This will actively support the development and delivery of initiatives that will help increase engagement and help deliver action and projects that make a real difference to people and communities. • Voluntary Action Oldham, through its Transforming Local Infrastructure funding and activities, is developing ideas to establish a fund for Oldham to which it can fund-raise and support ideas, projects and activities that will help improve lives and communities across Oldham.

2.7 This report is therefore set out in two parts:

Part 1 – addresses the general issue of dormant or under used charitable funds for which the Council is responsible, describes options for the funds and makes recommendations on their future use.

Part 2 – sets out the proposed way forward for creating the Co-operative Oldham Fund.

Page 5 of 30 [Charities Report] January 2013 3 Current Position

PART 1 – SUGGESTED WAY FORWARD FOR CHARITABLE FUNDS

3.1 A comprehensive review of the status of the Council’s charities was undertaken and reflects the most up to date valuations of the funds. There are proposals for the future usage/operation of each of the funds. The proposals are set out below:

Proposal 1 - Transfer Trusteeship to relevant school or college – where applicable

Proposal 2 - Merge with an existing charity – where applicable

Proposal 3 - Transfer of the administration of active charities to the trustees

Proposal 4 - Wind up the charities and donate funds to another organisation

Proposal 5 - Transfer to the Co-operative Oldham Fund

Proposal 6 - Do nothing pending further developments

3.2 Using the legislative framework available, the detailed recommendations arising from the review are set out below. The charities have been examined under categories as follows:

a) Education related funds b) Other charities (with no landholding) – see Appendix 1 for details of these charities c) Charitable funds not registered with the Charity Commission d) Charitable funds for which no change is proposed e) Charities with land holdings

Proposal 1

3.3 There are 35 Educational Trust funds for which the recommended approach is the transfer to school or college for which the fund was initially established. These funds are set out in the table below and total £73,686. A standard letter which can be sent to the schools listed below is attached at Appendix 2. The school will therefore be given the options to: a) Agree that the Council formally closes the charity and donates any proceeds to the school, or b) Take back trusteeship of the charity, thus relinquishing Oldham Council of any administrative or financial role, or c) Relinquish any right to the charitable fund and the associated assets which would enable the Council to formally close the charity and donate the money to the Co-operative Oldham Fund.

Page 6 of 30 [Charities Report] January 2013 Transfer Trusteeship to relevant school or college

School/College Fund £ Alt Primary The Albert Wrigley Memorial Prize Fund 151 Beever Primary Thomas Wade Scholarship 5,135 Broadfield School Marjorie L Ward Prize Fund 141 Dobcross C of E Primary Dobcross C Of E (Controlled) School Memorial Fund For The Rev H A Thomas 765 Fitton Hill Primary Clara Bracewell Memorial Courtesy Prize fund 97 Fitton Hill Primary Prize Funds Held In Connection With Fitton Hill County Junior School 105 Freehold Primary JM Ross Memorial Prize Fund 108 Freehold Primary Frank Riddle Memorial 67 Freehold Primary SE Stock Prize Fund 123 Hathershaw College Marcroft Langfield Scholarship 1,573 Hathershaw College Alderman Broadbent Memorial Prize fund 172 Kingfisher School George Young Legacy 109 Kingfisher School George Young Legacy 156 Lyndhurst Primary The D Brook Prize Fund 2,422 Oasis Academy The Cartmell Prize Fund 1,178 Oldham Academy North The Alderman Stuart Worfolk Prize Fund 312 Oldham Academy North Councillor Barnett Prize 158 Oldham Academy North Councillor Christopher McCall Prize Fund 280 Oldham College Joseph A Platt Legacy / Platt Token of Respect 40,659 Oldham College John Wilkinson Prize 2,360 Oldham College The J T Hilton Prize Fund 1,341 Oldham College William H Slater Prize Fund 437 Oldham College John Houghton Broadbent Prize 1,212 Oldham College Alfred Ryan Memorial Prize 3,173 Oldham College Amalgamated Society Of Woodworkers 367 Oldham College Waterhead Mutual Technical School Prize Fund 328 Radclyffe School Daisy Irene Carney Prize 1,747 Radclyffe School Michael Warrington Prize 631 Radclyffe School Robert Humphreys Sportsman of the Year Award 5,184 Richmond Primary Harold Hilton Memorial Prize 138 Saddleworth School Saddleworth Secondary School Memorial Fund For The Rev H A Thomas 1,117 St Hugh’s C of E The Rountree Prize Fund 53 Waterhead Academy The Annie Platt Geography Prize 563 Watersheddings Primary Abel Bridge Prize Fund 121 Werneth Primary William Kershaw Prize Fund 1,204 TOTAL 73,686

Page 7 of 30 [Charities Report] January 2013 Proposal 2 3.4 There is one fund, the Oldham Children’s Holiday Association, with resources of £56,029 which it is recommended should be merged with another Charity, the Oldham Children’s Holiday Fund so that the combined new fund can access all resources and be managed more effectively. See Appendix 1 (g) for fund details

Proposal 3 3.5 There are three active funds for which the recommended approach is the transfer of the administration of the fund to the trustees. These are set out below. These funds total £662,241 but with the merger of the Oldham Children’s Holiday Association this increases to £718,270.

OMBC Transfers administration of active charities to trustees £ - A V Davies (See Appendix 1 (a) for fund details) 169,449 - Oldham Children’s Holiday Project * (See Appendix 1 (h )for fund details) 416,055 - Archer, Marjory Tate and Dame Lees Prize Fund 76,737 TOTAL 662,24 1

* Note this does not include the value of the 2 chalets

3.6 It should be noted that the trustees of the three charities would have to take direct responsibility for all administration and governance of the charity. At the moment, some of the officers of the Council and officials such as the Mayor are automatically listed as Trustees. However, if the constitution of the charity was changed, the trustees would be those who were directly interested in maintaining the charity, who might indeed be elected Members or local clergy. However, if trustees are not willing to continue under a revised management arrangement, the way forward would be to wind up the charity and donate funds elsewhere. The Co-operative Oldham Fund would be the suggested recipient.

Proposal 4 3.7 There are three Charities for which the recommended approach is that they are wound up and funds donated to organisations which are aligned to the original purpose for which the Charity was established. The funds in these three Charities total £53,295 and are presented in the table below.

Wind up and donate funds to another organisation £ - Dr Yates Legacy Fund 4,619 - Marjorie Lees Gift Charity 11,999 - Royton District Sick & Needy Fund 36,677

TOTAL 53,295

Page 8 of 30 [Charities Report] January 2013 3.8 The detail of the funds and the reasons for the recommendation are set out in Appendix 1 sections (d), (e) and (i). These may be summarised as:

Dr Yates Legacy Fund – donate to the Oldham Gallery Marjorie Lees Gift Charity – donate to the Royal Oldham Hospital (Maternity Unit) Royton District Sick & Needy Fund – donate to Dr. Kershaw’s Hospice.

Proposal 5 3.9 There are 41 charities for which the recommended approach is transfer to the Co-operative Oldham Fund as their objectives are either general or difficult to administer effectively or fairly in the way originally intended, outdated, or relate to educational establishments that no longer exist. These have total resources available of £590,282 and are presented in the table below. Most of these are education related funds but there are three that are not (the Memorial Hall Fund, Bowater Charity and Chadderton Sick Poor Fund). Details of these funds and the reason for the recommendation can be found in Appendix 1 (f) (b) and (c)).

Recommended for transfer to Oldham Fund £ John Armitage Scholarship Fund ( see note below ) 221,706 James Arnold Scholarship Fund 6,849 Ebenezer Particular Baptist Church Grants 2,280 Andrew Sidney Scholarship Fund 46,395 G Whitehead Scholarship Fund 1,576 Yates And Clegg Scholarships 158,295 Marland Fold School Fund 1,507 James Smith Fairnie & A W Collier Prize Funds - Secondary Schools (Constituent Charities) 2,528 Sankey Memorial Fund 167 James Middleton Prizes 706 G M Handley Prize Fund 123 G H Rigby Prize Fund 156 Geoffrey E Staines Memorial Prizes 847 Joseph Brierley Prize Fund 233 Arthur Newton Prizes Fund 12,961 Ellen Travis Prize 20,729 The Lord Emmott Prize Fund 5,151 Carl Paulson Memorial Fund 2,547 The A H Joslin Memorial Prize (Harold Halkyard) 12,230 Memorial Hall Fund (see Appendix 1 (f)) 24,071 Bowater Charity (see Appendix 1 (b)) 5,626 Chadderton Sick Poor (see Appendix 1 (c )) 27,679 Education Committee School/Prize 3,943 The Higginson Book Prizes Fund 183 Recommended for transfer to Oldham Fund £

Page 9 of 30 [Charities Report] January 2013 Renals Character 5 Leslie Hale Prize Fund 1,684 Anne Collins Prize 345 Gerald Pritchett Memorial Fund 257 Frank Cousins Peace Prize 3,096 Oldham Schools' Music Association Award Fund 4,082 Anthony Thornton Hodge Award 1,539 Park Dean Fund 979 Marcroft Langfield Scholarship 1,573 George Ross Prizes Fund 383 Alderman Broadbent Memorial Prize fund 172 Royton Cotton Mills Institute Prize Fund 2,386 John William Burgess Scholarships 3,512 Walter Moseley Prize 2,954 The Hague Fund 3,486 Elizabeth Marie Oddie Will Trust 5,223 Stanley Helliwell Geography Prize 119 TOTAL 590,282

3.10 It should be noted that, whilst the John Armitage fund has had a number of amendments to its governing documentation, one element of the fund was created specifically for Hathershaw Technical School (or its successor) and so should be separately held for the use of the school. Prizes of up to £30 were to be awarded to pupils pursuing courses of advanced technical education. Whilst very few prizes have been awarded in recent years, two options are suggested as a way forward:

a) an element of the Co-operative Oldham Fund is earmarked specifically for prizes for Hathershaw School, or b) a sum of £3,000 is offered to Hathershaw School as a once and for all settlement of the obligations of the John Armitage fund based on the resources required to award 10 prizes of £30 for a 10 year period (note, there have been few prizes awarded over recent years that accord with this specific bequest).

3.11 Option (b) is the recommended approach and if it is accepted, the total resources available for transfer to the Co-operative Oldham Fund set out in the table above would reduce to £587,282.

3.12 Appendix 3 presents funds that are not registered with the Charity Commission. Ten of the eleven funds at Appendix 3 have never been set up as charities, and therefore have no known trustees but have accumulated balances of £58,204. Charity law applies to these funds as though they were charities and therefore the Council has the same responsibility towards these funds as it has to others included in this report.

3.13 It is assumed that they were set up for specific purposes some years ago but all knowledge of the purpose of the funds has been lost. Whilst efforts have

Page 10 of 30 [Charities Report] January 2013 been made to find further information, nothing has been found. The eleventh fund (the R H Whitehead Foundation) is no longer registered with the Charity Commission and has a small balance of only £1,000. It is therefore recommended that all these funds are merged into the Co-operative Oldham Fund.

3.14 Appendix 4 sets out information on four charities for which OMBC is the trustee. As highlighted in the Appendix, these funds all have a land holding. It is not, however, proposed to transfer any of the land to the Oldham Fund, rather that it will continue to be held by the charity. Is therefore recommended that:

a) The Clayton Playing Field Charity is still active and operating and should continue unaltered at present

b) The cash balance of three charities totalling £10,535 should be transferred to the Co-operative Oldham Fund as follows:

Williams Mullins Legacy Fund £5,575 Werneth Park Land Sales £1,848 Town Lands Trust £3,112 £10,535

3.15 Overall it is recommended that £657,021 of funds are transferred to the Co- operative Oldham Fund and it is also recommended that, if some or all of the proposals set out in paragraphs 3.4 to 3.6 cannot be actioned, then any remaining funds are also added to the Fund.

Proposal 6 3.16 In addition to the Clayton Playing Field Charity mentioned at 3.14 (a), there are two other funds shown on Appendix 3 for which OMBC is the Trustee and for which there are no proposals to change current arrangements at this time. The position in relation to these is as follows:

a) The Hopwood Trust – balance of £733

This is linked to the Crompton Bowling Club and Crompton Cricket Club as the Trust offers financial assistance to both clubs. At present, discussions are taking place about the future of the 2 clubs as membership is declining and the future sustainability of the clubs is in doubt. It is therefore recommended that no decision about the future of the fund is made until the Clubs have determined a way forward.

b) The Oldham Mayor’s International Disaster Fund – balance of £15,264

This fund was created during 2004/05 to alleviate suffering arising from the flood in Bangladesh. The former Mayor who initiated the fund has recently indicated he wishes this fund to be held pending further consideration of its use.

Page 11 of 30 [Charities Report] January 2013 Charity Commission Advice

3.17 In order to ensure that options for the charitable funds are in accordance with Charity Commission rules and regulations, a meeting was held with the Charity Commission in December 2011.

3.18 The Charity Commission has confirmed at the meeting in December 2011 that, where the Oldham charities are classed as a ‘Type 2’ Charity, the trustees only need to pass a simple resolution to spend any permanent endowment and then ask the Commission to remove the Charity from the register. No permission needs to be sought from the Charity Commission prior to taking the decision that the purposes of the Charity can be carried out more effectively by spending the permanent endowment. The Charity Commission would however, require evidence by means of a formal minute, which confirms the decision of the trustees.

3.19 If the income of the Charity is over £1,000 and a permanent endowment made entirely of property that was entirely given and has a market value of more than £10,000 a Charity is a ‘Type 1’ Charity. If any of the characteristics of Type 1 do not apply then a charity is classed as a Type 2 charity. All charities for which a change in fund usage is proposed within this review are considered to be ‘Type 2’ charities.

PART 2 - THE ‘CO-OPERATIVE OLDHAM FUND’

3.20 Having established that there is a willingness to support the creation of the Co- operative Oldham Fund, as identified in Part 1 of the report, it is recommended that £657,021 of dormant funds are utilised for the Co-operative Oldham Fund and that this is combined with the £250,000 that the Council has allocated a one-off basis as a commitment to the Co-operative agenda. This will therefore create a larger fund of £907,021 that will help deliver action and projects that make a real difference to people and communities.

3.21 It is suggested that the Fund will be based on five core principles: a) Sustainability – that is the fund should be replenished from a series of sources, which include: Interest accruing from investment of dormant trust fund monies; Fund-raising activities ; Interest on investments if part of Fund operates as evergreen investment ; Contributions from donors or others.

b) Collaboration – the operating arrangements for the Fund would seek to bring together key representatives from the Public, Private and Voluntary Sectors. There is also the ambition to involve the Youth Council (see below).

c) Innovation and making a difference –there is a growing recognition of both the need for individuals and communities to help themselves, and the

Page 12 of 30 [Charities Report] January 2013 need to support communities as they develop opportunities to solve the problems they identify. It is often the small ideas and projects that can make the biggest difference to people’s lives and this Fund would have the potential to turn a small idea into a big difference.

d) Added value – the could involve offering match-funding organisations / groups to unlock bigger investments for Oldham;

e) Focused – either on agreed key issues or themes, for example poverty, enterprise or community benefit.

3.22 Whilst there are options as to how this Fund might be managed, it is proposed that:

a) It is managed by an external, existing organisation with Charitable Trust status which would be the accountable body (regulated by the Charities Commission). Having considered a range of options, and procurement implications, it is suggested that Voluntary Action Oldham (VAO) is uniquely placed to deliver the Councils requirements, particularly in relation to fund raising ability, experience of working across multiple sectors and links with existing community networks, and therefore should be established as the host organisation for the Fund. VAO is well placed to publicise, promote and operate the Fund, acting as a filter and signposting applicants to other funds and grant opportunities as appropriate.

b) It is established as a restricted fund under VAO management which will enable fund raising to help the fund have more impact over a longer period of time or potentially become self-sustaining if sufficient income was generated. The new fund will be classed as a restricted fund and will have a separate panel to receive applications and make recommendations to the trustees of VAO. It is suggested that this Panel comprises:

• Three Elected Members appointed direct by Oldham Council • One Member appointed by Oldham Business Leaders’ Group • Two Members appointed by the Voluntary, Community and Faith Partnership • One Member appointed from the Youth Council.

3.23 The precise details of the governance arrangements and criteria that will be used to make awards from the Co-operative Oldham Fund are still being considered. The basic principle, however, is that the criteria for the Fund should be clear but not so specific as to limit and constrain the level of engagement, innovation and delivery. The funding criteria could include such matters as:

• innovation • clear evidence of co-operative partnership working

Page 13 of 30 [Charities Report] January 2013 • how funding can help make things happen (that wouldn’t otherwise) • what the co-operative opportunity is (e.g. social value) • if an evergreen opportunity, what the rate of return would be • if bridging loans, operate through a suitable partner and clarity about substantive funding and repayment deadlines • clear evidence of matched resourcing (cash, kind, time) • support for future fundraising for Co-operative Oldham Fund (creating a perpetuating cycle of funding) • opportunity to bring more resources into Oldham (e.g. match funding)

Other issues which are being considered are: • The evidence/deliverables required from applicants • The relationship between the Fund and other existing grant processes and how it can it be ensured that they are complementary • The development of a brand for the Fund. • The focus for fundraising

3.24 It is planned, that subject to approval of the proposals in the report, that the target date for launch of the Fund is 14 th February 2013 as this will be the anniversary of the Love Where you Live Campaign and provide a good opportunity for publicity, communication and engagement.

3.25 Clearly, if the recommendations of this report are accepted, there is some work to be undertaken with VAO to create the new fund and agree the governance arrangements. A project team of officers including representatives from Legal and Finance will be established to ensure that the necessary financial arrangements and safeguards are in place. It is suggested that the governance arrangements, including those relating to financial and legal matters, be approved by Cllr Brownridge, Cllr Jabber and Cllr Stretton on behalf of Cabinet under delegated authority.

4 Options/Alternatives

Option 1

(i) The recommended option is that that Cabinet approves the proposed way forward for the use of £1,575,769 of charitable resources as set out in sections 3.3 to 3. 16 of the report. This would be subject to final agreements and safeguards being approved by Councillors Jabbar, Brownridge and Stretton.

This option presents the best opportunity to use the dormant trust fund monies and one-off £250,000 to establish a sustainable Fund to support the delivery of the co-operative ambition. This sustainability would come from the fund-raising element which would be undertaken by VAO.

(ii) That Cabinet approves the proposed operation of the Co-operative Oldham Fund and the management arrangement using Voluntary Action Oldham as set out in sections 3.22/3.23 of the report.

Page 14 of 30 [Charities Report] January 2013

Option 2 - That Cabinet does not agree with the proposals contained in this report and requests that a further report be prepared taking into account any issues raised.

This would mean that the anticipated launch date of 14 th February could not be achieved.

5 Preferred Option

5.1 The preferred option is that Cabinet approves:

(ii) That Cabinet approves the proposed operation of the Co-operative Oldham Fund and the management arrangement using Voluntary Action Oldham as set out in sections 3.22/3.23 of the report.

6 Consultation

6.1 Consultation on the future of the dormant and under used funds has at this stage has been restricted to Oldham Community Accountancy Service, Council officers, the former Mayor and the Charity Commission. Once approval has been given to the way forward, Council officers will need to consult with those involved in the administration of active charities and potential recipients of funds in order to make progress. Consultation will therefore include discussions with:

• The 19 schools and colleges about the transfer of the administration of funds.

• The Trustees of the Oldham Children’s Holiday Project regarding its merger of the Oldham Children’s Holiday Fund.

• The Trustees of the three active charities about their future administration.

• The potential recipients of donations from wound up charities, the Oldham Gallery, the Royal Oldham Hospital and Dr. Kershaw’s Hospice.

Page 15 of 30 [Charities Report] January 2013 6.2 The Charity Commission will also need to be advised of revised status of the charities.

6.3 With regard to the operation of the Co-operative Oldham Fund, consultation has taken place with elected members, a range of Council officers, the Charity Commission and VAO.

7 Financial Implications

7.1 The report sets out options for the improved administration of £1,575,769 of Charitable funds for which the Council acts as sole Trustee or Custodian Trustee. Although the funds are included within the published accounts of the Council, it is not able to utilise the funds for its own purposes and must abide by the terms and conditions governing the use of the funds and the relevant legislation. The approval of recommendations in this report would remove some of the funds from inclusion with the accounts of the Council in the future and lead to the more effective use of the charitable resources.

7.2 The Charity Act 2006 gives the Council power to transfer and/or spend permanent endowments and the power to change the objectives of the charity. Using this approach, the recommended course of action for the charitable funds can be summarised as follows:

Recommended Use of Dormant/Under Used Funds £ £

Transfer to the Co -operative Oldham Fund - proceeds of 41 charities with objectives that can no longer be fulfilled 587,282 - proceeds of 11 funds with no known Trustees 59,204 - proceeds of 3 other charities for which OMBC is the Trustee 10,535 Total Funds to be Transferred to the Co -operative Oldham Fund 657,021

Other Funds to be Wound up or Transferred away from the Administration of the Council - transfer 35 funds or Trusteeship to relevant school or college 73,686 - transfer to Hathershaw School to address the requirements of the John 3,000 Armitage Fund - wind up and transfer to other organisations reflecting the fund’s intended 53,295 usage - merger of one fund with an existing charity and transfer the 718,270 administration of the remaining three funds to Trustees Total Other Funds to be Transferred from the administration of the 848,251 Council

Page 16 of 30 [Charities Report] January 2013

7.3 The report also sets out key issues in relation to the creation of the Co- operative Oldham Fund including the use of £657,021 of dormant funds and £250,000 of Council resources set aside as a commitment to the Co-operative agenda. The creation of the new fund managed by an external organisation will be designed in such a way as to ensure both the charitable funds and Council resources are utilised in a manner consistent with the intentions of the Council. Therefore work will be undertaken to ensure that the Co-operative Oldham Fund financial arrangements safeguard the resources but at the same time lead to their effective utilisation. (Anne Ryans)

8 Legal Services Comments

8.1 The Legal Department has been involved in the discussions leading to the preparation of this report and the legal framework has been set out in this Report. The Council has wide powers to rationalise and release funds for active use with the active support of the Charity Commission. However, issues can arise on individual funds it is important to follow the course of consultation referred to in this report once the general approach and direction has been approved.

In the case of the administration of those charities and funds which it is proposed should be transferred to Voluntary Action Oldham it will be necessary to obtain appropriate exemption from the Council’s Contract Procedure Rules. (Geoffrey Berriman)

9. Co-operative Agenda

9.1 It is important to take steps to ensure that the Co-operative Oldham Fund is both sustainable and effective in supporting individuals and organisations to make a difference to their lives, communities and neighbourhoods. By amalgamating one-off Community Dividend Funding, investing resources from dormant trusts and receiving income from fundraising etc. this will make the Fund more sustainable and be a more effective way of supporting engagements and bids than operating three separate activities.

10 Human Resources Comments

10.1 N/A

11 Risk Assessments

11.1 N/A

12 IT Implications

12.1 N/A

Page 17 of 30 [Charities Report] January 2013

13 Property Implications

13.1 N/A

14 Procurement Implications

14.1 Procurement regulations have been followed with regard to the proposal to engage Voluntary Action Oldham to operate the Co-operative Oldham Fund given the ambition to ensure the Fund is sustainable through on-going fund raising.

Voluntary Action Oldham is considered to be the only organisation that can satisfy the Councils current requirements and currently the level of management fees associated with the administration of the Fund are below our tender threshold of £50K. (K Lowes)

15 Environmental and Health & Safety Implications

15.1 N/A

16 Equality, community cohesion and crime implications

16.1 None

17 Equality Impact Assessment Completed?

17.1 No

18 Forward Plan Reference

18.1

19 Key Decision

19.1 Yes

20 Background Papers

20.1 The following is a list of background papers on which this report is based in accordance with the requirements of Section 100(1) of the Local Government Act 1972. It does not include documents which would disclose exempt or confidential information as defined by the Act: Name of File: Charities reports Records held in Finance Department, Level 14 Oldham Civic Centre West Street Oldham OL1 1UG Officer Name: Anne Ryans

Page 18 of 30 [Charities Report] January 2013 Contact No: 4902

21 Appendices

Appendix 1 - Non-Education Related Charities with no Land Holding Appendix 2 – Draft Letter to Schools/Colleges Appendix 3 – Charitable Funds not Registered with the Charities Commission Appendix 4 – Other Charities for which the Council is the Trustee

Page 19 of 30 [Charities Report] January 2013 APPENDIX 1

Non-Education Related Charities with no Land Holding

The table below sets out the range of non-education related charities with no land holding administered by OMBC. This appendix also provides some detail about the current operation of each charity and a recommended course of action.

Name Charity Value Number A V Davies Charity (for the Poor) (a) 511941 169,449 Bowater Charity (b) 510887 5,626 Chadderton Sick Poor Fund (c) 225139 27,679 Dr Yates Legacy (d) 521264 4,619 Marjorie Lees Gift Charity (e) 225261 11,999 Memorial Hall Fund (f) 230398 24,071 Oldham Children’s Holiday Association (g) 502376 56,029 Oldham Children’s Holiday Project (h) 503611 416,055 Royton Sick and Needy (j) 234750 36,677 Total 752,204

Only the A V Davies Charity, the Oldham Children’s Holiday Association and the Oldham Children’s Holiday Project are Type 1 charities (see section 3.19 above)

(a) A V Davies Charity (for the Poor) £169,449

Governing Document

The charity was set up by a will in 1942, but updated with a Charity Commission scheme in 1981. The trustees are nominated by OMBC and they meet regularly to grant money following requests from residents of the Ecclesiastical Parishes of St James, East Crompton, St Mary, High Crompton and Holy Trinity, Shaw. The Trustees have the power to grant money to individuals or to or to make donations or subscriptions to institutions or organisations which provide help to individuals in need, hardship or distress.

Operation of the Charity Currently, donations are only made directly to individuals and the trustees have not managed to spend all of the income of the charity in past years. The trustees are currently operating this charity with all administrative support given by OMBC staff.

Options a) OMBC could relinquish its role as custodian trustee, by using the powers in the Charities Acts to update the governing document so that the Fund could be managed by the Trustees alone. This would relieve OMBC of the administrative burden of managing the Fund. b) Consideration could be given to the idea of transferring the assets to the Oldham Fund with the express wish that it was used for the benefit of the people of Shaw and High Crompton.

Page 20 of 30 [Charities Report] January 2013 Recommendation

OMBC relinquishes its role as custodian trustee and passes all administrative duties back to the trustees of the charity.

If the trustees are unwilling to take on the administration of the charity, then the Fund is transferred into the Co-operative Oldham Fund.

(b) Bowater Charity £5,626

Governing Document

The Bowater Charity was established to provide support to inhabitants of the former area of the Crompton Council in the following ways: • The relief of the aged impotent and poor • The relief of distress and sickness • The provision and support with the object of improving conditions of life • The provision and support of educational facilities

Operation of the Charity The charity has been inactive for a number of years.

Recommendation The Fund should be transferred to the Co-operative Oldham Fund.

Governing Document The Chatterton Sick Poor Fund was established to give benefit to “sick poor persons” in Chadderton for food, medical comforts and medicines, extra bedding and fuel and medical and surgical appliances. Financial grants can also be given to help individuals to obtain these items. The trust deed notes that due to the establishment of the National Health Service the assets of the charity should be disposed of for the benefit of the sick poor in Chadderton in ways supplementary to the scope of the National Health Service.

Operation of the Charity The charity had not been used and is out of date in its purposes. The governing document has even given the trustees the power to dispose of the permanent endowment following the formation of the NHS.

Options • The funds could be transferred to the Co-operative Oldham Fund with the express wish that they be used for the benefit of the people of Chadderton. • The Charity is a Type 2 charity for the purposes of the statutory right to spend a permanent endowment (see section 3.18 above). The trustees could wind up

Page 21 of 30 [Charities Report] January 2013 the charity and donate the resulting income to an organisation operating for the benefit of the people of Chadderton relating to medical need.

Recommendation The Fund should be transferred to the Co-operative Oldham Fund.

(d) Dr Yates Legacy £4,619

Governing Document The Dr Yates Legacy Fund was established for the promoting, maintaining, facilitating and extending the study of natural history by means of lectures, conferences, discussion or any other method of practical instruction.

Operation of the Charity The charity has been inactive for a number of years.

Option a) As this charity has an income of less than £1,000 per year and the market value of the permanent endowment is less than £10,000 the trustees can pass a resolution under Section 75A of the Charities Act 1993 following which the value of the Fund can be transferred to the Oldham Gallery who can use the funds to help finance natural history exhibitions which will enable the charity to be wound up. b) transfer the funds to the Co-operative Oldham Fund

Recommendation The Fund be transferred to the Oldham Gallery who can use the funds to help finance natural history exhibitions as this has some resonance with the original purpose of the Fund.

(e) Marjorie Lees Gift Charity £11,999

Governing Document

The Miss Marjory Lees Gift Account No 1 was established for the benefit of women in need that were receiving treatment in the Maternity Unit at The Oldham and District General Hospital.

Operation of the Charity The charity has been inactive for a number of years.

Recommendation The charity can be wound up and the permanent endowment accessed to enable a donation to the Royal Oldham Hospital for it to spend on the comfort of the women using the Maternity Unit.

Page 22 of 30 [Charities Report] January 2013

(f) Memorial Hall Fund £24,071

Governing Document The Mayor of Oldham’s Memorial Hall Fund was an appeal fund set up with the purpose of erecting or otherwise providing, furnishing, equipping and maintaining a suitable memorial hall in Oldham to perpetuate the memory of those who lost their lives in the Second World War.

Operation of the Charity Insufficient funds were collected to build a memorial hall and the fund has never been used. It would now be impracticable to give the money back to the donors of the funds.

Recommendation Transfer the fund to the Co-operative Oldham Fund

(g) Oldham Children’s Holiday Association £56,029

Governing Document The income of the charity is to be used for providing children with holidays. Only the expenses of the children are covered and not their families.

Operation of the Charity The funds are not being used.

Recommendation The assets are transferred to the Oldham Children’s Holiday Project.

(h) Oldham Children’s Holiday Project £416,055 (excluding the valuation of the chalets)

Governing Document The funds for this charity were established following an appeal by a former Mayor of Oldham. The project exists to enable children and their families to have access to 2 holiday chalets in Wales.

Operation of the Charity The charity is active but OMBC is still maintaining all the financial records of the charity, paying bills and other expenses. OMBC is also listed as a trustee.

Recommendation The management of the charity should be transferred to the trustees to relieve OMBC of the administrative tasks and OMBC resigns as a Trustee.

Page 23 of 30 [Charities Report] January 2013

(i) Royton Sick and Needy £36,677

Governing Document The Royton District Sick and Needy Fund was established for the benefit of needy and deserving sick persons of the district of Royton in the following ways: • The supply of special food and medicines, medical comforts, extra bedding, fuel and medical and surgical appliances; • The provision of domestic help; • The grant of money so as to enable the recipients to obtain such benefits

Operation of the Charity The charity has been inactive for a number of years.

Options a) The charity is small enough for the Trustees to consider winding it up and making a cash donation to a charity in Royton that caters for sick people such as Dr Kershaw’s Hospice. b) The Fund is transferred to the Co-operative Oldham Fund and used specifically for the people of Royton. Recommendation

The Fund is wound up and cash donation made to Dr Kershaw’s Hospice as this has some resonance with the original purpose of the Fund.

Page 24 of 30 [Charities Report] January 2013 APPENDIX 2

DRAFT LETTER TO SCHOOLS /COLLEGES

Civic Centre, West Street, Oldham, OL1 1QJ.

Tel: 0161 770 Fax: 0161 770 Dear

RE: Name of School/Fund

I write to inform you that Oldham Council has reviewed all charitable trusts for which it is the sole trustee. As the sole trustee of many such charities, Oldham Council ensures that the necessary annual returns are made to the Charity Commission and manages the financial assets of the charity. The Council was aware that many of the funds for which it acts as a trustee have been dormant for some time and that other funds can no longer be utilized in the way that reflect the intention of the benefactor. The object of the review was therefore to examine all funds and consider the possible means for the improved use and administration of the charitable resource that the Council is responsible for managing. The Council now wishes to explore options for all such charities and their assets under Section 74 of the Charities Act 1993 (amended by 2006 Act) As you will be aware your school is currently a beneficiary of XXXXXXX charitable fund(s) which currently has/have (a) balance(s) of £XXXX. Following this review, Oldham Council, working with the Charity Commission has identified the following three options open to your school with regard to the Charity named above. 1. The Council can formally close the charity and donate any proceeds to your school. 2. Offer your school the opportunity to take back trusteeship of the charity, thus relinquishing Oldham Council of any administrative or financial role. 3. Offer your school the opportunity to relinquish any right to the charitable fund and the associated assets. If this were to be the case, Oldham Council would formally close the charity and donate the money to a new fund that will be established in the near future, the ‘Co-operative Oldham Fund’. This new fund will have its own charitable objectives but these will reflect the overall intention of all funds that are merged into it i.e. to be for the benefit of Oldham citizens. The Council will actively distribute funds to the intended new beneficiaries.

Page 25 of 30 [Charities Report] January 2013 The Council has made a formal decision that it wishes to pursue these options and therefore asks that you advise of the option that your schools prefers and inform the Council accordingly. If you have not responded by XXXXX date, you will be reminded of the options. If, however, there is still no response from your school within 3 weeks of the date of issue of the revised notification, it will be assumed that you are content with option 3 and the charitable fund(s) will be wound up. Please do not hesitate to contact me if you should wish to discuss any aspect of this issue or have any queries in this regard.

Yours sincerely,

Name: Job Title: Direct Line: Email:

Page 26 of 30 [Charities Report] January 2013 APPENDIX 3

CHARITABLE FUNDS NOT REGISTERED WITH THE CHARITY COMMISSION

TRUSTEES UNKNOWN

Balance Charity name Charity number Trustees @ 31/3/12 Central Comforts Fund Not on Charity Commission website UNKNOWN 7,011 Hollies Reserve Fund Not on Charity Commission website UNKNOWN 6,448 Maternity Gift Home A/C Not on Charity Commission website UNKNOWN 8,628 Rothwell Comforts Fund Not on Charity Commission website UNKNOWN 22,163 Children In Care Not on Charity Commission website UNKNOWN 1,920 John George Newton Playing Fields Not on Charity Commission website UNKNOWN 9,295 24th Manchester Regiment Wreath Not on Charity Commission website UNKNOWN 35 Failsworth Party Fund Not on Charity Commission website UNKNOWN 708 Robert Sidlow A/C Not on Charity Commission website UNKNOWN 114 Oldham Workshop For The Blind And Disabled Not on Charity Commission website UNKNOWN 1,882 526527 (removed from Charity Commission R H Whitehead Foundation Register 09/09/09) UNKNOWN 1,000 TOTAL 59,204

OMBC as TRUSTEES

Balance Charity name Charity number Trustees @ 31/3/12 Hopwood Trust Not on Charity Commission website OMBC 733 Oldham Mayor’s International Disaster Fund Not on Charity Commission website OMBC 15,264

TOTAL 15,997

APPENDIX 4

OTHER CHARITIES FOR WHICH THE COUNCIL IS THE TRUSTEE

Set out below is a table that shows four current charities for which the Council is the trustee and for which there is land ownership. More detailed information on each of these funds is also presented together with a recommendation about the future of the charitable fund.

Charity Balance Charity name number Trustees @ 31/3/12 Clayton Playing Fields 703067 OMBC 54,500 William Mullins Legacy Fund 521274 OMBC 5,575 Werneth Park Land Sales 521273 OMBC 1,848 Town Lands Trust 223919 OMBC 3,112 TOTAL 65,035

Clayton Playing Fields £54,000

The Governing Document

This Charity has a Governing Document dated 6 April 1962. It was set up for the provision of playing fields for the benefit and enjoyment of the inhabitants of the area of benefit (Chadderton, Royton and Oldham)

Operation of the Charity

The annual accounts of the Charity are presented to the Trustees, the Council, prior to a meeting of Council. The Charity is responsible for the grounds maintenance, insurance and administration of the playing fields and receives income from the letting of football pitches and the interest on its investment fund but this is managed by the Environmental Services team. To ensure that there is no deficit, the Council makes an annual contribution from its Green Space revenue budget and in the last financial year (2011/12) for which the accounts have been prepared, the contribution was £26,030.

Recently, the Council secured funding of £29,360 from a section 106 planning obligation for the provision of some new changing rooms at Clayton Playing Fields and is currently in the process of trying to identify further funding to support this scheme.

The balance of the investment fund is £54,000 and remains at this level with interest being applied to the operation of the playing fields.

Recommendation

As there is the potential for a changing room development, it is recommended that this Charity continues in its present format until such time as the future of the development has been determined.

Note - This charity continues to operate and is not technically within the remit of the review but has been included for completeness.

William Mullins Legacy £5,575

The Governing Document

The charity has a governing document dated 26 July 1920 and it was set up to make grants to individuals for education, training or sport. The charity has ownership of land that is currently maintained by the Council.

Operation of the Charity

Income has been accumulated and not spent and the charity has been in effect dormant for some time.

Options

It is proposed that the land is retained by the charity but with regard to the cash balance, under S 74 of the Charities Act 1993, the Trustees could: a) Use their powers to alter the governing document to properly apply the funds relevant to the modern day b) Utilise the funds for the maintenance of the land; or Transfer the cash assets to the Oldham Co-operative Oldham Fund

Recommendation

Transfer the cash assets to the Co-operative Oldham Fund and retain the land holding within the ownership of the charity

Werneth Park Land Sales £1,848

The Governing Document

The charity has a governing document dated 8 January 1936 and it was set up for the purpose of the provision of open space and recreation ground including facilities, open space and buildings. The charity owns land that is currently maintained by the Council.

Operation of the Charity

Income has been accumulated and not spent and the charity has been in effect dormant for some time.

Page 29 of 30 [Charities Report] January 2013 Options

It is proposed that the land is retained by the charity but with regard to the cash balance, under S 74 of the Charities Act 1993, the Trustees could: a) Use their powers to alter the governing document to properly apply the funds relevant to the modern day b) Utilise the funds for the maintenance of the land; or c) Transfer the cash assets to the Co-operative Oldham Fund.

Recommendation

Transfer the cash assets to the Co-operative Oldham Fund and retain the land holding within the ownership of the charity

Town Lands Trust £3,122

The Governing Document

The charity has a governing document dated 21 July 1931 and it was set up for the placing of certain lands in Oldham under the management of trustees and for making conveyances therefore as annual rents for the benefit of the poor of Oldham. The charity has ownership of land that is currently maintained by the Council.

Operation of the Charity

Income has been accumulated and not spent and charity has in effect been dormant for some time.

Options

It is proposed that the land is retained by the charity but with regard to the cash balance, under S 74 of the Charities Act 1993, the Trustees could: a) Use their powers to alter the governing document to properly apply the funds relevant to the modern day b) Utilise the funds for the maintenance of the land; or c) Transfer the assets to the Co-operative Oldham Fund

Recommendation

Transfer the cash assets to the Co-operative Oldham Fund and retain the land holding within the ownership of the charity

Page 30 of 30 [Charities Report] January 2013