Meeting documents

1. THE ISSUE

1.1. This report updates the Trustees on the costs incurred necessarily in completing the Strategic Review. It also provides an update on the various consultant appointments engaged in supporting the review and clarifies roles for the new Trustee Board and the Council as local authority.

2. RECOMMENDATION

2.1. Note the loan of £120,000 approved by Council on 30^th March as requested by the Trust on 23^rd March.

2.2. Note the appointments of Mr Keith Bray as Trust Independent Adviser and Ms Francesca Quint Senior Counsel as senior legal adviser enabled by the additional loan funding.

2.3. Note the terms of the loans approved by Council to date and the draw down of funds from the Council to date of £175,000.

2.4. Note the total estimated costs of taking the Strategic Review Report through to completion of approximately £135,000 and the estimated costs of turnstile repairs of £62,000 taking the total loan required by the Trust at present to £197,000.

2.5. Approve the further drawdown of £22,000 necessary to complete the Strategic Review Report.

2.6. Note that in taking forward the decisions from the Strategic Review further expenditure will be incurred depending on the decision reached for which the Council has already approved an unspent balance of £23,000.

2.7. Note that in all matters connected with the Recreation Ground Trust that Councillor Malcolm Hanney will represent the Council as lead Member

3. FINANCIAL IMPLICATIONS

3.1. Included in the report.

4. THE REPORT

4.1. With the agreement of the Charity Commission the Trust commissioned a Strategic Review to examine the current position, explore future options and uses for the Recreation Ground and examine ways in which to create a viable and sustainable future making the best possible use of the Trust's resources for the benefit of the public and in the light of the Trust's charitable purposes.

4.2. The significant pieces of work involved in the review included an extensive public consultation managed by BDOR Limited, a financial options appraisal undertaken by Ernst & Young and extensive legal advice from experienced independent Senior Counsel. Further information contributing to the report has been supplied by Council officers acting on the Trust's behalf..

4.3. The Review has been managed in-house by Council officers acting in their capacity as Trust Advisers co-ordinating the various activities of consultants and their appointments. The level of interest from the public and media as the review has progressed has generated additional work in the form of press enquiries questions and general correspondence. This has led to some slippage in the Review timetable (against the original reporting deadline anticipated by the Charity Commission of March 2007) due to additional time taken in organising and delivering the extensive public consultation process (which was reported to the Trust Board in March 2007) and further correspondence with the Charity Commission necessitating additional legal advice in order to ensure that the many issues raised by the Commission were adequately addressed as part of the work undertaken in preparing this report..

4.4. Loans

4.4.1. On 7^th June 2006 the Council Executive approved a sum of £100,000 to support the Strategic Review and the Trust approved borrowing of £55,000 at its 12^th December 2006 meeting. A further loan was requested by the Trust at its 23^rd March meeting of £120,000 to secure further legal advice from Senior Counsel and Professional adviser support and to carry out essential repairs. This was necessary to address the range of issues that had arisen as a result of discussions with the Charity Commission This request was approved by Council on 29^th March 2007..

4.4.2. The table below shows the drawdown of funds from the Council by the Trust. The terms of the loans are to be repaid over a 10 year period or sooner if possible with interest at the Councils costs of borrowing, which are substantially below market rates. This is fixed at 4.75% for the June 2006 loan and 5.25% for the March 2007 loan.

4.5. Consultants appointments

4.5.1. As previously stated the Trust appointed Ernst & Young and BDOR Consulting to undertake substantial pieces of work forming significant components of the Review. Following the Trust decision in March 2007, senior Counsel Francesca Quint has continued in her role as legal advisor to the Council on all issues relating to its powers and obligations as a Charitable Trustee. She is an eminently experienced Counsel in matters of Charity Law and a former Deputy Charity Commissioner. She was appointed by the Solicitor to the Council in June 2006 under delegated powers to ensure expert and demonstrably impartial advice was available on the issues of concern.

4.5.2. The Independent professional advisor Role has been fulfilled by Mr Keith Bray (introduced to the Committee at the last meeting in April) an independent consultant with extensive experience in dealing with complex and sensitive matters.

4.5.3. At present the appointments are on an "as required" basis in order to complete the Strategic Review Report. There will undoubtedly be further work in taking forward the Trust Board Decision - this will likely include discussions with the Charity Commission regarding the decision ,possibly development of a Cy Pres scheme if the decision is acceptable, negotiations with third parties whatever decision is taken and potentially extension of the Trust Board representation and constitutional amendments. This may require additional external professional support in taking forward the Strategic Review outcomes

4.6. Costs Incurred to Date

4.6.1. The costs incurred to date are detailed in the table below together with an estimate of costs incurred in completing the report. The Trust has agreed borrowing of £113,000 from the Council to date and will require a further advance of £22,000 to fund the remaining cost of the Review Report.

4.6.2. The Strategic Review report and consequent decisions represent a further step on the journey to achieving a workable solution for the Recreation Ground. Following the decision taken by the Board in respect of the Strategic Review the Charity Commission will determine whether or not they accept the decision of the Trust Board as being in the best interests of the Trust and its beneficiaries and are prepared to support the proposals or some variation of them. It will be at this point that the Trust will have to further consider implementing the Trust Decision or responding to further advice from the Charity Commission. The costs likely to be incurred following this decision can only be surmised and so a further report will be brought to this Board with regard to future cost implications following a determination from the Charity Commission on the acceptability of the preferred decision of the Trust.

4.7. Roles & Responsibilities

4.7.1. In concluding the Strategic Review Report the appointment of independent advisors further reinforces the separation of roles between the Council and the Trust. The Trustees are also reminded that although Council members, whilst acting in the capacity of Trustees, only decisions that are in the best interests of the Trust and within the objects of the Trust and /or Charity Law can be taken. No account can be taken of the political wishes of the Council or its aspirations or indeed any consequence(financial or otherwise) other than those that relate to the Trust's purpose. The scope for decision making at present is limited within the existing objects of the Trust and many issues including the Strategic Review will need the endorsement of the Charity Commission.

4.7.2. With regard to the Council's role in connection with the Trust,responsibility for all matters within budget rests with the Cabinet.It is understood that the Cabinet is likely to allocate lead responsibility rests to the Executive member for Resources, Councillor Malcolm Hanney.

5. RISK MANAGEMENT

5.1. In taking decision, the Trust must always be mindful of its financial position and the complexities of the issues and challenges it has to face. A step approach has therefore been adopted to ensure that the costs of achieving the many steps needed to be taken in this complicated process are fully understood as they unfold. Further reports will be presented to the Trust as it becomes clearer what course of action are necessary

6. RATIONALE

6.1. The Recreation Ground through historic circumstances is currently administered in a way which does not wholly accord with the charitable purposes set out in its Trust Deed. The Strategic Review is designed to assist the Board, in conjunction with the Charity Commission, to ensure a more certain and legally secure future. The outcome of the Review will take time to implement and further costs will be incurred in achieving this

7. OTHER OPTIONS CONSIDERED

7.1. None.

8. CONSULTATION

8.1. Interim Director of Support Services; Chief Executive; Monitoring Officer

9. ISSUES TO CONSIDER IN REACHING THE DECISION

9.1. Subject to further information: the decisions taken are necessary or expedient in completing the Strategic Review.

10. ADVICE SOUGHT

10.1. The Council's Monitoring Officer (Council Solicitor) and officer on behalf of the Section 151 Officer (Strategic Director - Support Services) have had the opportunity to input to this report and have cleared it for publication.