South Lakeland District Council Cabinet 9th April 2014 South Lakeland District Council Royal Wedding Fund-Future Options PORTFOLIO: Councillor Graham Vincent – Health and Wellbeing Portfolio Holder

REPORT FROM: Shelagh McGregor - Assistant Director (Resources) and Chief Finance Officer

REPORT AUTHOR: Matthew Neal - Solicitor to the Council

WARDS: not applicable

KEY DECISION NO: not applicable

1.0 EXPECTED OUTCOME 1.1 The purpose of this report is to seek approval from Cabinet to wind up the South Lakeland District Council Fund originally set up in Commemoration of the Wedding of His Royal Highness Prince Charles to Lady Diana Spencer (“the Trust”) and to pass the Trust fund to 3 other organisations with similar purposes as set out in the report. 1.2 A consequential amendment to the constitution would enable Audit Committee to take an oversight role in terms of ensuring that the money is spent for the appropriate purposes RECOMMENDATION Cabinet is recommended to give approval to the following:

(1) The winding up of the South Lakeland District Council Fund in Commemoration of the Wedding of His Royal Highness Prince Charles to Lady Diana Spencer (“the Trust”); and

(2) The assets of the Trust be passed to three charities in the following proportions: (a) One-sixth of the assets of the Trust to the Leeds Children’s Holiday Camp Association (otherwise known as the Leeds Children’s Charity); (b) One third of the assets of the Trust to Bendrigg Trust ; and (c) Half of the assets of the Trust to ; and

(3) The Assistant Director (Resources) and Chief Finance Officer be authorised to take all necessary steps to give effect to the winding up of the Trust and

(4) Full Council be recommended to approve that the Audit Committee’s terms of reference be extended to include, under the heading of Audit Activity, monitoring the expenditure of funds transferred from the Trust to the above charities.

3.0 BACKGROUND AND PROPOSALS 3.1 The Trust was set up by a deed of trust of 17th March 1982. It is duly registered with the Charity Commission. The charitable object is "for the purpose of promoting the benefit of children under the age of 16 years resident within the United Kingdom who are poor by arranging holidays for them within the District of the Council in such manner as shall from time to time determined by the Trustees."

3.2 Holidays were arranged annually, usually at Lakeside, Newby Bridge or at Bendrigg Trust, Old Hutton. The last holiday was at Lakeside to a value of £1,800 in August 2000. The Trust was inactive from that date until it convened a meeting on 19 July 2013

3.3 The Chairman of the South Lakeland District Council for the time being and the Assistant Director Social Services for South Lakeland are both ex officio trustees. Therefore Councillor Westwood and Lyn Burns are Trustees. Councillor Andy Shine was appointed as trustees in June 2013. On 19 July 2013 the Solicitor to the Council and the Assistant Director (Resources) and Chief Finance Officer were appointed as Clerk to the Trust and Treasurer to the Trust respectively

3.4 The Trust deed states that if at any time the Trustees shall decide that the purposes of the fund cannot continue to be carried out they may determine that the cash investments and any other property held on account of the fund shall be applied for any other similar charitable purpose. This purpose shall be determined by the Council in accordance with a scheme to be settled by the Council. In default the Council shall apply to the Charity Commission for a scheme.

3.5 At its meeting of 19 July 2013 the Trustees considered options for the future of the Trust. The Trustees considered that continuation of the Trust and the resources needed to manage it would be undesirable. Trustees expressed the desire that the Trusts funds should be transferred to an organisation or organisations that would keep to the original aims and objectives of the Trust, to provide holidays in South Lakeland for disadvantaged people under the age of 16. The Trustees therefore agreed that:

“ (1) in principle the aim of winding up the Trust and the transfer of its funds to an organisation with similar aims and objectives be accepted; and (2) the Clerk to the Trust be authorised to identify and then invite suitable organisations with similar aims and objectives to make application to the Trust to received its funds (or part thereof); and (3) a subsequent meeting of the Trust shall consider applications made pursuant to (2) above and make recommendations to South Lakeland District Council that; a. the Trust be wound up; and b. an appropriate organisation or organisations shall receive the assets of the Trust, subject to conditions enforcing the original purpose of the Trust.”

3.6 The Clerk to the Trust subsequently made enquiries of CVS, and also utilised the Charity Commission web site to seek Charities with a similar objectives to that of the Trust.

3.7 After consultation with the Trustees, the Clerk to the Trust identified 3 charities which have objectives which are similar to those to the Trust and who have premises available for holidays in South Lakeland. The objectives, as set out on the Charity Commission website, are as follows

(a) BENDRIGG TRUST THE BENDRIGG TRUST RUNS HIGH QUALITY COURSES FOR DISABLED AND DISADVANTAGED PEOPLE WHO COME TO BENDRIGG FROM ALL PARTS OF THE UK FOR A DAY, WEEKEND OR A WEEK. WE AIM TO PROMOTE INTEGRATION, ENCOURAGE INDEPENDENCE AND BUILD SELF-CONFIDENCE THROUGH THE USE OF RESIDENTIAL EXPERIENCE AND THE SAFE PROVISION OF ADVENTUROUS ACTIVITIES DELIVERED BY DEDICATED, QUALIFIED STAFF. Where it operates CUMBRIA

(b) BRATHAY TRUST THROUGH OUR WORK WE SEEK TO INSPIRE CHILDREN AND YOUNG PEOPLE TO ENGAGE POSITIVELY IN THEIR COMMUNITY. WE DO THIS BY DELIVERING INNOVATIVE PROGRAMMES, SHARING OUR KNOWLEDGE AND EXPERTISE AND WORKING IN PARTNERSHIP WITH OTHERS THAT SHARE OUR VISION. Where it operates THROUGHOUT AND WALES, FRANCE, SCOTLAND

(c) LEEDS CHILDRENS HOLIDAY CAMP ASSOCIATION

TO PROVIDE FREE RESIDENTIAL SHORT BREAKS/RESPITE FOR UNDERPRIVILEGED CHILDREN OF LEEDS AND TO PROVIDE AND MAINTAIN A PURPOSE BUILT PROPERTY AT SILVERDALE NEAR MORECAMBE. THE CHILDREN ARE REFERRED BY HEAD TEACHERS AND SUPPORT STAFF IN THE LEEDS PRIMARY SCHOOLS TOGETHER WITH SOCIAL WORKERS, FOSTER PARENTS AND OTHER ASSOCIATED ORGANISATION Where it operates LEEDS CITY

3.8 On 30 December 2013 the Clerk to the Trust wrote to the organisations listed at paragraph 3.7 above and set out an introduction to the work of the Trust and the way forward that Trustees had agreed at the meeting of 17 July 2013. The Clerk to the Trust then asked for confirmation from each organisation as to:

(a) whether it was interested in being a candidate organisation for the assets in the event that the Trust were to be wound up; and (b) whether it would be able to use the assets of the Trust (or part thereof) for a similar charitable purpose to that of the Trust in the event that the Trust were to be wound up.

3.9 Confirmation as to both (a) and (b) above was duly received from each organisation. Invitations to Bid were then sent out and bids were received from each organisation. All of the 3 bidders are seeking 100% of the Royal Wedding Funds.

3.10 On 13 March 2014 the Trustees considered all of the bids and concluded that all of the applications had considerable merit and should receive a share of the proceeds of the Trust. It was considered that Brathay Trust as the largest organisation should receive the largest share, with Bendrigg and Leeds Children’s Charity receiving progressively smaller shares of the Trust. The recommendations (1), (2) and (4) in the report are in accordance with the recommendations of the Trustees.

3.11 Winding up of the Trust require a formal decision by the Cabinet. Any such move would require some means for the Council to monitor that the transferred money is being spent in the manner that the accepted bids outlined. It is considered that this monitoring task could be carried out by the Audit Committee. This addition to the Committee’s terms of reference would need to be agreed by full Council.

4.0 CONSULTATION Bendrigg Trust 4.1 Bendrigg Trust is based near Old Hutton and its holidays would be at its Headquarters at Bendrigg Lodge. They previously hosted holidays for the Royal Wedding Trust. They run residential activity holidays and courses for groups of young people from all over the UK. Many of these young people are also socially disadvantaged. The majority of Bendrigg Trust user groups for 2012 were people with learning and multiple disabilities. Only 5% were disadvantaged.

4.2 They provide holidays for disabled and disadvantaged groups of young people from all over the UK. Their costs are higher than mainstream centres due to higher staffing ratios presumably due to their emphasis of on disabled people rather than disadvantaged people.

4.3 Bendrigg Trust’s proposal is to use the Royal Wedding Fund’s money as a sponsorship fund to help disadvantaged people who cannot afford the full fees.

4.4 For the financial year 1 January 2012 to 31 December 2012 Bendrigg Trust had unrestricted funds of £304,485 to act as a reserve fund.. They had an operating deficit of £99,000 for the year with Liquid assets balance of £266,630 at the year end.

4.5 Bendrigg Trust is a professionally based organisation with 25 members of staff (full time and part time). It has 19.6 full time equivalent members of staff with a forecast employment cost in 2014 of £516,118. It uses 210 days of volunteer time for its maintenance programme and administration and household work. It also uses up to 10 volunteer work parties per year. It allows approximately 140 volunteers and students who accompany tutors when leading groups of visitor.

4.6 Their current costs for a 5 day holiday (Monday to Friday) are £311.

Brathay Trust 4.7 Brathay Trust has stated that children would use their coach house at Brathay Hall. It has 10 beds in shared rooms. 4.8 Brathay Trust particularly caters for children from the North East, the North West and Yorkshire and Humberside who are disadvantaged or vulnerable. They work towards reducing offending and anti-social behaviour and helping children who are heading in the direction of being not in education, employment or training. 4.9 Brathay Trust state that Trust funds could provide holidays for approximately 220 children at (£270 per child) based upon 5 days / 4 nights duration and they would use the funds within 2 years. 4.10 Providing holidays for 10 children at a time would in their opinion be an optimum number and they could partake in outdoor activities such as climbing, scrambling and hill walking. They also propose to seek match funding to increase the number of children who would benefit. 4.11 Brathay Trust is a much larger organisation then the other bidders. For the year ending 31 March 2013 it had a bill for wages and salaries, National Insurance and pension costs of £2,715,000 with one member of staff earning between £70,000 and £79,999. Its current staffing establishment comprises Full Time: 63; Part Time 21; Fixed Term Contracts 20. 4.12 In the year ending March 2013 the Brathay Trust made a net loss of £224,000. It has negative liquidity with liabilities of £690,000. Liabilities include deferred income of £782,000. It also has a trading subsidiary Brathay Services Ltd. which had a turnover of £149,333 in 2012/13 and made a profit in the same year of £22,812 which was then donated to the Brathay Trust.

Leeds Children’s Charity 4.13 Leeds Children’s; Charity (“the Charity”) has a narrower scope than the other 2 bidders as it provides free residential breaks for disadvantaged children of Leeds aged 7 to 11. It provides 500 places each year at its Holiday Centre in Silverdale. Its headquarters are within the South Lakeland district very close to the border and within the Arnside and Silverdale Area of Outstanding Natural Beauty 4.14 The Holiday Centre is purpose built to accommodate 60 children and their carers. The children are disadvantaged for many reasons including poverty, neglect homelessness, domestic violence, and substance abuse (amongst others). 4.15 The Charity provides free holidays and intends that the Trust’s money would be used to provide such holidays for children from the most deprived areas of Leeds. They anticipate that they will be able to provide 5 day holidays at a cost per child of £200. 4.16 The Charity is a smaller organisation than the other bidders. Their total employment costs in 2013 were £144,878. They currently employ 14 staff with no employee receiving in excess of £50,000 per year. 4.17 For the year ending December 2013 the Charity had a net income of £10,754. It in fact made a net loss in the previous year of £37,348. It had a liquidity of £20,898. 5.0 ALTERNATIVE OPTIONS 5.1 The alternative option is to seek to start the process of finding candidate organisations again and seeking to ascertain a wider group of bidders. This step is not recommended as it is not clear that this step will produce any wider group of potential recipients. 6.0 LINKS TO COUNCIL PRIORITIES 6.1 Whilst the Council Plan is not relevant to the aims of the Trust the proposals within this report will enable disadvantaged children to explore South Lakeland. 7.0 IMPLICATIONS 7.1 Financial and Resources 7.1.1 The total value of the Trust as at 31 March 2013 was £60,023.19. 7.1.2 It is not anticipated that the proposals within this report will result in any substantive costs to be borne by the Trust. 7.1.3 It is anticipated that any monitoring of the expenditure of the transferred funds can be carried out by Audit Committee without any substantial costs to the Council. Any concerns can be either directed to the transferree charity concerned or the Charity Commission as enforcing authority. 7.2 Human Resources 7.2.1 Not applicable. 7.3 Legal 7.3.1 It is anticipated that all the legal work involved in relation to this matter can be dealt with in house. 7.4 Social, Economic and Environmental 7.4.1 Not applicable. 7.5 Equality and Diversity 7.5.1 An equality and diversity impact assessment has not been carried out as there are no equality issues arising out of the proposals within this report. 7.6 Risk Risk Consequence Controls required That a successful bidder Fewer children will benefit The Trustees, acting on for funds does not from holidays. the best advice from the achieve best value for Clerk and the Treasurer to money in terms of using the Trust have sought to the proceeds of the ascertain the most Trust. suitable recipients. That a successful bidder The transferred money would Trustees have given becomes insolvent. not be used for the purposes careful consideration of for which it has been the financial robustness of held/transferred. the bidders. CONTACT OFFICERS Report Author - Matthew Neal, Solicitor to the Council Tel: 01539 793305 email [email protected] APPENDICES ATTACHED TO THIS REPORT N/a BACKGROUND DOCUMENTS AVAILABLE n/a TRACKING INFORMATION

Assistant Portfolio Solicitor to the SMT Scrutiny Director Holder Council Committee 18/03/14 18/03/14 Report Author 27/03/14 Executive Committee Council Section 151 Monitoring (Cabinet) Officer Officer 9/03/14 18/03/14 18/03/14 Human Leader Ward Resource Councillor(s) Services Manager n/a