Meeting documents

Board of Trustees of the Recreation Ground, Bath
Monday, 10th March, 2008

Cllr Chris Watt
The Recreation Ground, Bath
c/o The Guildhall
High Street

Charity Commission Direct

PO Box 1227, Liverpool L69 3UG

t: 020 7674 2541

f: 020 7674 2301

Your Ref:

Our Ref: KGD-G607825-ICU(Ldn)

Date: 6 March 2008

Dear Chris

The Recreation Ground, Bath (1094519) ("the Rec")

We agreed at our meeting on the 26 February to write to the Bath Recreation Ground Trust Board confirming our current position and what we require from the Trust Board to enable us to assess the grounds and merits of the trustees' resolution of 6 June 2007.

As we explained at the meeting, the difficulties involving this charity have been going on for several years now. The Commission's role since the court declared the Rec to be charitable, has been to work with the Trust Board to ensure that the Trust Board puts the charity back on a sound constitutional and governance footing and that it deals with the difficult issues that have arisen in the context of the users of the land and the established charitable trusts. Any formal regulatory action by the Commission has to be justified both in terms of due process but also by the case made by the Trust Board. The Commission must ensure it acts within its statutory powers and in particular here we must be satisfied the necessary legal thresholds are met.

As explained at the meeting, we have fully considered all the information provided to us by the Trust Board and others. We can see that progress has been made and the resolution of the issues seem to be moving in a positive direction. However there remain matters to be resolved.

As you and your legal counsel know, the factors that apply when considering resolution of the issues with the Leisure Centre are different from those that apply when considering the issues with the occupation of the Rugby Club. For the sake of clarity I have addressed the specific issues separately. However, if the outstanding issues that the Trust would need to deal with could be resolved, then it is likely that any decision taken by the Commission will address these issues holistically by way of a single Scheme to deal comprehensively with the issues.

Leisure Centre

1. The objects of the Rec are concerned with the use of the land as open space for recreational purposes. The Leisure Centre provides for indoor recreational activities.

2. The Trust Board has asked that the Commission considers whether a cy-pres occasion has taken place over the land forming the site of the Leisure Centre. We needed to form a view whether Section 13 (1) (e) (iii) of the Charities Act 1993 as amended by the Charities Act 2006 applied on the basis that the original purposes have ceased to "provide a suitable and effective method of using the property available by virtue of the gift". It was key to assess whether the use of the site of the Leisure Centre as an open space has ceased to be a suitable method of using it, now that it has been built on by the construction of the Leisure Centre. Taking into consideration that this would require the demolition of a useful facility and its replacement elsewhere, we consider that the case and circumstances for a cy-pres occasion have been met to allow for indoor recreational use. In reaching that conclusion, we also take into account the purposes for which the Leisure Centre are used as these are closely allied to those for which the site would be used if it were not built on. If those uses are not themselves within "the spirit of the gift", they at least share with the spirit of the gift, being for the purposes of enabling the public to take recreation.

3. However, we also had to take into consideration that it is clear (and was clear when B&NES' predecessor purchased the ground), that the Leisure Centre was not self supporting and would require a subsidy from public funds. If it is to continue, B&NES, in its capacity as local authority, would have to subsidise it. Therefore, if we are to promote a scheme for the Leisure Centre, the Commission must be satisfied that the following conditions are met and that this is evidenced to the Commission:

  •  The Trust Board will have to seek agreement with B&NES as the local authority to ensure that proper arrangements are made for the future funding of the Leisure Centre and for its demolition when its lifespan as a sports centre and available to the public is over.
  •  It seems to us that the best way of doing so would be for the charity to grant B&NES, as local authority, a long lease of the building on a full repairing and insuring basis which would contain an obligation on part of the lessee to demolish the building and reinstate the site as an open space if the building ceases to be used as a sports centre available to the public.
  • The land is currently vested in the Official Custodian of Charities and so although it is the responsibility of the Trust Board to secure and negotiate any such lease arrangement, the transaction would be in the name of the Official Custodian. Given the dual role that B&NES has, this resolves the other problems we and your legal counsel highlighted.

The Commission's view is that any alteration to the purposes for which the site of the Leisure Centre can be used, to include indoor recreation, does not need to be limited to the existing life of the current building. If the circumstances now exist which make the original purposes no longer a suitable and effective method of using the property available by virtue of the gift, those purposes can be altered to permit an additional purpose, even if it is foreseeable that the additional purpose may not be possible or appropriate for ever.

The next steps as regards the Leisure Centre are therefore for the Trust Board to deal with.

Bath Rugby Club

As we explained at the meeting. This is much more complicated.

For the Commission to consider if it can lawfully exercise its powers in considering the Trust Board's request to have power to grant a lease of further additional land to Bath Rugby Club('the Club'), we need to be fully satisfied that any detriment arising to the charity from the proposed is significantly outweighed by all the benefits that the Rec will receive. If it is not for the benefit of the charity, legally, we cannot proceed further.

Since any additional land leased to the Club would not be used directly for charitable purposes, it seems to us that any benefit to the charity from any arrangement with the Club can only be of the following kind, namely:

  • The income from the further letting which could be used to further the objects of the Rec: the benefits of this additional income must be balanced against not only the direct detriment that will flow from the loss of the even more land for the charitable purposes of the Rec but also the detriment to the Rec of making the Club more secure and furthering the growth and development of its facilities;
  • The grant of the further letting which could enable the Rec to procure from the Club other benefits to further the objects of the charity: as we discussed, one benefit which the Trust Board could seek to secure from the Club in return for the letting of additional land is an early surrender of its current lease, as this benefit could offset the detriment of the lease of the additional land as detailed previously; and
  • The Trust Board might be able to procure from the Club in return for the letting of additional land, the increased use of all the land leased to the Club for the charitable purposes of the Rec. This might include increased charity use of Club facilities during the rugby season. However, I think you and your legal counsel acknowledged that the Club itself seems to be confused about the nature of what charitable activities are relevant for this purpose.

We discussed each of these in greater detail at our meeting.

There is very little detail in the Strategic Review or elsewhere of what benefits might be obtained. The Trust Board needs to provide the Commission with a specific proposal that includes a detailed list and analysis of both the benefits and detriments arising to the Rec from the proposed lease of the additional land to the Club and the basis upon which it believes that the former outweigh the latter, before any further consideration can be given to the exercise of our powers.

We are not rejecting the application nor refusing to exercise our powers. However, based on the submission the Trust Board has made, we are not satisfied we have seen any specific proposal that passes the legal test. Any arrangement or deal with the Club needs to be of greater benefit to the charity and it is over to the Trust Board now to see if they can secure that.

One issue we did not discuss at the meeting was the Trust Board's original suggestion to alter the purposes of the Rec more generally to restate them in terms of Recreational Charities Act 1958. Your thinking may have moved on about this. We do not believe that this should be necessary but should you wish us to consider this further, you will need to provide further details for a case and the necessary information in support.

It would also be useful to be updated in due course about your latest thinking about the future composition of the trustee(s).

We understand that the Trust Board will be meeting on the 10 March to discuss the issues raised in this letter. Perhaps if you contact me after that to update me on what the Trust Board has decided to do and how this will be progressed. Matters are now in the hands of the Trust Board. We are alert to the external timing issues and will do all we can to deal with this when it returns to us as quickly as possible.

Yours sincerely,

Kenneth Duncan