Meeting documents

Board of Trustees of the Recreation Ground, Bath
Thursday, 17th July, 2008

Chris Watt
The Recreation Ground, Bath
C/O the Guildhall
High Street

By email and post

Charity Commission Direct

PO Box 1227, Liverpool L69 3UG

t: 020 7674 2347

f: 020 7674 2301

Your Ref: KB/BG

Our Ref: CH-G607825- ICU(Ldn)

Date: 25 June 2008

Dear Chris

The Recreation Ground, Bath (1094519)

Thank you for the letter of 12 June and the enclosed information regarding the proposed temporary lease for East Stand to Bath Rugby Club.

On the basis that the Trust Board considers that:

1. Granting of the temporary lease is in the best interests of the Charity because a final resolution of the problem posed by the occupation of the Rec by the Rugby Club cannot realistically be achieved before the commencement of the next playing season;

2. The temporary stand represents the Charity's largest source of income accounting for some 75% of its total income. Without this income the Charity will effectively be insolvent and notwithstanding the moral obligations of the local authority, there are no financial ones to provide an alternative income stream;

3. Granting the lease has no adverse impact on implementing the Strategic Review outcome, whichever option is agreed with the Commission. At the time the decision was taken by the Trust Board it was expedient not only financially, but also strategically to ensure that none of the options considered within the Strategic Review were prejudicially affected. Not granting the lease would in effect remove 2 of 3 options as realistic outcomes from the Strategic Review;

4. Not granting the lease will make it far more difficult in negotiating a new lease on significantly more favourable terms to the Charity with the Rugby Club, particularly if the Charity's financial position is significantly weakened by the loss of income arising from the lease. As the Rugby Club have strongly indicated no intention of relinquishing the remaining 61 years of their main lease it seems tactically prudent to ensure that no obstacles prevent the Charity from implementing its preferred outcome from the Strategic Review;

5. A valuation assessment undertaken in April 2008 by an independent professional valuer stated that, "I consider the rent agreed to be the best rent achievable in the market place. Granting this new lease to Bath Rugby Club is in the best interests of the Trust.".

On these grounds which are supported by the Trust Board having satisfied to date and continuing to comply with the Commission's directions set out in the order dated 20 July 2007, I can confirm that the Commission is willing to authorise the Trustees to enter into the proposed temporary lease with the Rugby Club on the terms of the draft tenancy agreement provided to us on 22 June 2008. This is on the basis that, for the above reasons, this lease is expedient in the interests of the Charity.

This authority will be provided by way of and subject to an order under s.26 of the Charities Act 1993 as amended by the Charities Act 2006 ("the Act") .

Similar to the terms of the order dated 20 July 2007, this order sets out a number of directions that the Commission will require BANES to comply with in order to ensure that a long term solution is reached to the current issues relating to the use of the Rec. This will include BANES' agreement to a timetable of any action the Commission considers is necessary from time to time to attain the final outcome, whenever this is decided.

As you are already aware, the making of this order should not be taken as a confirmation or, indeed, an indication that the Commission is satisfied that `option two' is expedient in the interests of the charity. Since the 2007 order was made, BANES have identified the option in the strategic review to grant a lease of further additional land to Bath Rugby Club as the proposed final solution to the Rugby Club's continuing occupation of the Rec. The Commission confirmed that it was not yet satisfied that the Charity had put forward any specific proposal that passes the legal test which would allow the Commission to make a legal Scheme to allow the lease.

BANES 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 and the Charity was going back to the Rugby Club to secure an arrangement which was of greater benefit to the Charity. The outcome of this is currently awaited. The order directs that BANES submit that proposal to the Commission by 1 August 2008.

A copy of the draft order is attached. Please advise us of any comments or factual inaccuracies by 7 July 2008.

You should also be aware that on sealing the order we will be informing Mr Worthy Gilson, as representative of the Friends of Bath Residents' Recreation Ground, that we have authorised the trustees to enter into the proposed lease.

I hope this letter is clear. Should you require any further information please do not hesitate to contact me 020 7674 2541.

Yours sincerely

Kenneth Duncan

Compliance and Support