OG1 B4 - PUBLICATION OF OUR INTENTION TO MAKE A SCHEME

In this section...

OPERATIONAL GUIDANCE

ORDERS AND SCHEMES

PUBLICATION OF OUR INTENTION TO MAKE A SCHEME OR TRUSTEE ORDER

OG 1 B4 – 27 October 2009

Purpose

This guidance explains what notice, both public and personal, must be given of our intention to make a Scheme or trustee Order.

1. Introduction
2. Public notice and representations
3. Personal notices for Schemes and Orders made under s16 of the 1993 Act
4. Posting the draft Scheme on the website
5. Consultation
6. Confirmation of position by trustees
7. Representations and objections
Glossary of Terms used in this Guidance

Index to further related information


The Law	Refer to a lawyer	Refer to an accountant

1. Introduction
	This section of guidance covers the legal requirements for giving public notice of our intentions to make Schemes and Orders, and for giving personal notice to trustees, as well as any trustee or other person who is being removed from office.
	Section 2 below covers the requirements for public notice in detail, while section 3 covers the requirements for personal notice.
	The guidance also covers the issues we have to consider before deciding whether or not to give public notice of our intention to make Schemes and Orders.
	The aim of giving public notice of our intentions is to attract relevant and useful comments from interested parties, which may have a bearing on the provisions of the Scheme or Order.
	The provisions of section 20 of the 1993 Act mean that the Commission can now decide not to give public notice of the intention to make a Scheme or Order where this is unnecessary. There is also discretion to decide that notice does not need to be given after a Scheme or Order is made, although, in practice, except in exceptional circumstances, we always post a copy of the authorised Scheme or Order on our website.
	In order to reduce the timeframe for making a Scheme, and to reduce the burden on charities, our general policy is that public notice of Schemes and Orders is unnecessary unless there are special circumstances which demand it. What those special circumstances might be are discussed below at:-
	2.1.2 (for Schemes); and
	2.2.2 (for Orders relating to trustees or other individuals).
	The guidance also discusses, where publicity has to be given, how long the period of notice should be at:-
	2.1.3 (for Schemes); and
	2.2.3 (for Orders relating to trustees or other individuals).
	Please Note: Specialist Casework Division no longer seals Schemes and Orders. As from the 1 August 2009 these are authorised by the signature of the Authorising Officer. Compliance Division will continue to seal Schemes and Orders for the foreseeable future.

2. Public notice and representations
	2.1 Publicity requirements for Schemes 2.2 Publicity for Orders relating to trustees or other individuals 2.3 Description of Scheme or Order 2.4 Local charity 2.5 National charity 2.6 Reverter of Sites Act 1987 2.7 Pooling/CIF/CDF Schemes

	2.1 Publicity requirements for Schemes

	2.1.1 Overview of the law
	Section 20 of the 1993 Act covers the requirements for publicity when Schemes are established, and effectively gives control of the publicity process to the Commission.
	It provides that we may dispense with publicity altogether if we are satisfied that it is unnecessary, because of the nature of the Scheme or for any other reason. Our general stance is that unless there are strong reasons based on our new statutory objectives, publicity will not be required. Section 2.1.2 below gives guidance on the limited circumstances when publicity might be necessary.
	In the exceptional cases where we do determine that publicity is necessary, we will need to comply with the provisions of section 20.
	These mean that the Commission must:
	give public notice of the proposals, and invite representations about them to be made within a period specified in the notice. The Commission is obliged to consider any representations it receives within the period stated. The Commission may then proceed with the proposals, either with or without modifications, but no further notice is required; and
	make a draft of the Scheme available to the parish or community council if the Scheme relates to a local charity in a parish, or in Wales a community (but not if it is an ecclesiastical charity).
	The Commission will decide how long the period of notice should be. See 2.1.3 below for what criteria should be used to decide this.

	2.1.2 When is publicity necessary?
	The vast majority of Schemes will not be contentious and there will be no strong reasons for publicity and we can decide not to give publicity in those cases.
	We should inquire, at the outset of any Scheme case, whether the trustees consider that publicity is necessary. When we do this we should make clear the criteria we would use ourselves to assess this (see bullet points below) so that they can assess the question properly. When the trustees inform us of their opinion, they must confirm that they based their decision on these criteria.
	We must carefully consider the circumstances of the case, and the trustees’ opinion, before deciding whether or not public notice is required. There is significant potential for embarrassment both to the Commission and to the charity if a Scheme is implemented without taking account of what might be legitimate views in opposition to it.
	In potentially contentious cases, our expectation will be that the trustees, in deciding that to apply for a Scheme is in the best interests of the charity, will have carried out a consultation of their own before they apply to us for a Scheme. This in most cases will avoid the need for us to give further publicity at a later stage.
	We cannot require trustees to carry out a consultation, but where they have, we should ask for evidence of this – copies of notices for instance.
	If the level of controversy or other strong reasons based on our statutory functions appears to require it, we should go on to consider whether it is necessary to give publicity. This will involve an assessment of the potential risks to the charity and our statutory functions. The following questions are relevant to this consideration, but this is not an exhaustive list. Each case needs to be looked at on its merits in light of the Commission’s risk criteria:
	Is there a significant level of public interest in the aspects of the charity which the Scheme will affect?
	Does the Scheme materially affect functional or purpose property?
	Does it materially change the objects of the charity?
	Are we aware of any opposition to the proposed Scheme, which has not already been addressed by the trustees in their own consultation?
	If the answer to any of the above questions is ‘yes’, and the trustees have not carried out their own consultation before applying to us for the Scheme, we should consider giving public notice of the Scheme.
	It is possible that other factors may come into play when deciding whether or not public notice is necessary or desirable.
	These may include issues of urgency where any delay in implementing the Scheme could impact on the charity’s ability to operate, or where the proposals have already received publicity.
	If in doubt as to whether a period of public notice is necessary, caseworkers should consult a senior officer and take legal advice as appropriate.

	2.1.3 How long should the period of notice be?
	In most cases where publicity is given, the period during which the notice is displayed should be no more than one month. As a matter of administrative practice it is likely that any Scheme will take at least a further week to process and authorise.
	We may choose to reduce the notice period to less than one month, for instance, where the notices are being published in a newspaper or periodical which is published more frequently than once a month. In such cases, it is reasonable to assume that if someone does not act on the notice within, say, 2 weeks, it is unlikely that they will do so.
	In exceptional cases, the period of notice might be extended to 6 weeks if, for instance, this would help public confidence. It is extremely unlikely that any longer period would be appropriate.
	Reasons for extending the period of notice to 6 weeks might include where the period covers a holiday period or religious festival, eg Christmas or Ramadhan, or where the notices go up in places like parks and open spaces during the winter when there are potentially fewer visitors.
	With the aim of giving shorter notice periods, yet still achieving a useful outcome, consideration should be given to asking for outline comments or objections to be submitted within 2 weeks of the notice being given. If we receive none, we can proceed to sign the Scheme. If we do receive any relevant representations, we can defer the signing until they have been properly dealt with.
	For publicity requirements for Schemes once they have been made, see OG1 B5.

	2.1.4 When should the public notice period end?
	Where we have to give public notice, we must ensure that there is sufficient time for those who may be interested in the Scheme to comment on the proposals. This means that, where the date the notice is published locally or nationally is different to the date we put the Scheme or Order on our website, the public notice period will not end until one month after the latest of these two dates.
	For example, where the agreed notice period is one month, if we post a Scheme on our website on 1 January, and the trustees put up a notice locally on 10 January, the public notice period will start on 1 January but will not end until 10 February.

	2.2 Publicity for Orders relating to trustees or other individuals

	2.2.1 Overview of the law
	Before making a Scheme under section 16 or 18, we need to consider what personal notice we have to give to trustees. This is discussed in detail at section 3 below.
	Section 20(A)(5)of the 1993 Act requires that we must always give at least one month’s personal notice to any individual who we propose to remove from office, unless that person cannot be found or they have no known address in the UK. Full details of personal notice requirements and procedures are given at section 3 below.
	Section 20A of the 1993 Act covers the additional requirements for public notice when Orders are made to appoint, discharge or remove a charity trustee or holding trustee, and effectively gives control of the publicity process to the Commission.
	It provides that we may dispense with public notice altogether if we are satisfied for any reason that it is unnecessary. Our general stance will be that this additional publicity is not required unless absolutely necessary. Section 2.2.3 below gives guidance on the limited circumstances when publicity might be necessary.

	2.2.2 When do the publicity requirements not apply?
	Orders relating to the Official Custodian and Orders appointing additional charity trustees as we consider necessary for the proper administration of the charity under s.18(1) are excluded from any requirement for publicity.

	2.2.3 When should we give public notice of trustee appointments or removals?
	We will usually only have to give public notice in exceptional cases where we are satisfied it is necessary to do so in furtherance of our statutory objectives in the interests of the charity. Public notice may be interference with a right protected by the Human Rights Act 1998 and legal advice should be sought.
	In determining when we might wish to give publicity, we need to make a risk assessment of the consequences of not giving public notice. We will need to consider things like:
	the likely level of public interest in the case;
	the profile of the charity;
	the acquiescence (or not) of the individual if he or she is being removed by the Order; and
	the risk of our being accused of lack of transparency.
	If in doubt about whether public notice should be given, the caseworker should consult a senior officer.

	2.2.4 How long should the period of notice be?
	The Commission decides how long the period of personal notice will be, although if the Order is to remove, without his or her consent, a trustee, or officer, agent or employee of a charity, it must give him or her at least one month’s notice, and invite representations to be made during that period.
	The Commission may also give public notice of these proposals, giving a specified period for representations to be made. The period of public notice may run concurrently with the period of personal notice, although if this is the case, and, where the Order is to remove a trustee etc, it must also run for one month.
	In most cases where publicity is given, the period of notice should be no more than one month.
	We may choose to reduce the notice period to less than one month, for instance, where the notices are being published in a newspaper or periodical. In such cases, it is reasonable to assume that if someone does not act on the notice within, say, 2 weeks, it is unlikely that they will do so.
	In exceptional cases, the period of notice might be extended to 6 weeks if for instance this would help public confidence. It would be extremely unlikely that any longer period would be appropriate.
	Reasons for extending the period of notice to 6 weeks might include where the period covers a holiday period or religious festival, eg Christmas or Ramadhan, or where the notices go up in places like parks and open spaces during the winter when there are potentially fewer visitors.
	Section 20A provides that when the Commission does give public notice of the proposals, it must invite representations to be made to it within the period stated.
	If the charity is a local charity, a copy should also be made available at some appropriate place in the charity’s area of operation, unless the Commission is satisfied for any reason that this is unnecessary.
	Section 18(12) also requires us to give notice of removal to the other trustees. This is not with a view to prompting representations, but to notify them that removal is imminent and to give them the opportunity to make arrangements to deal with the consequences of the removal.

	2.3 Description of Scheme or Order
	The form of notice will depend upon the type of charity involved and, to some extent, upon the provisions to be included. It should be kept brief but highlight the principal points of the Scheme. At most, the purpose of the Scheme should be described in outline, for example, ‘Scheme appointing trustees’. The level of publicity will vary as set out below.

	2.4 Local charity
	How we publish notices for a local Scheme is no longer prescribed. We will only publicise in exceptional circumstances as set out above. In such circumstances we need to think carefully how best to publicise the Scheme or Order. The purpose of publication is to ensure that all those who may have a legitimate reason to be consulted are aware of the Scheme. Very often this will mean ensuring that a notice is given to the local parish or community council for display in a public place on the affected land or buildings. But it may be that publishing on a local website or in a local or sector newsletter or putting a notice in a well used post office is more appropriate. The case officer may want to discuss with the charity and/or local administrative authority the best way to publicise.
	Section 20(2) of the Act states that, in the case of local charities which are not ecclesiastical charities, as well as giving public notice, we must send a copy of the draft Scheme to:
	the parish or town council or (in Wales) the community council; or, if there is no such council;
	the chairman of the parish meeting.
	However, under section 20(4) of the Act we may decide that one, or both of these requirements are not necessary. If we decide to give public notice locally this does not mean that we must inform the local council. Similarly, we may decide that public notice is not necessary but we may choose to inform the local council.
	Where we have to give public notice, we will always post a copy of the Scheme on our website, see 4 below.

	2.5 National charity
	If we decide that publicity is necessary for a Scheme or Order for a charity which operates nationally, we have discretion about how best to do this. We should not think only about publicising in national newspapers (particularly as this can be expensive) but should also think about appropriate websites or e-newsletters.
	If the case officer is not sure what level of publication is appropriate, he or she should ask a senior officer or the Commission’s Communications team for advice. The notice need appear only once.
	Some charities have an unrestricted area of benefit in their governing document, but in practice operate in an identifiable geographical area. In such cases, public notice should be given in an area in which the charity is actually operating.
	Where we have to give public notice, we will always post a copy of the Scheme on our website, see 4 below

	2.6 Reverter of Sites Act 1987
	There are special provisions for notice for Schemes established under s.2 of the Reverter of Sites Act 1987. See OG27 B2.

	2.7 Pooling/CIF/CDF Schemes
	None of the personal or public notice requirements mentioned in this section apply to pooling Schemes or Schemes establishing common investment funds or common deposit funds (although we can give directions for publication).

3. Personal notices for Schemes and Orders made under s16 of the 1993 Act
	3.1 The law 3.2 Meaning of "party", "privy" or "non-privy" trustees 3.3 Identification of non-privy trustees 3.4 Period of personal notice under s.16(9) of the 1993 Act 3.5 Personal notice – s.20A of the 1993 Act

	3.1 The law
	Section 16(9) requires us to notify each charity trustee (not including holding trustees) of our intention to make a Scheme or Order made under section 16 of the 1993 Act (section 16(9)). This does not include trustees who:
	cannot be found, or have no known address in the UK; or
	are "party" or "privy" to the application. (This second condition does not apply if the Scheme is being made under s.18(2) following the opening of a s.8 statutory inquiry where we do have to notify trustees.)
	In order to avoid the need for issuing these personal notices, we should encourage all trustees to be party or privy to the application.

	3.2 Meaning of ‘party’, ‘privy’ or ‘non privy’ trustees
	Party and privy trustees
	A trustee is ‘party’ to an application for a Scheme if he or she is involved in the decision to apply for it. He or she is ‘privy’ to the application if he or she has prior knowledge that the application is being made. In general:
	a trustee who attended a meeting at which the application was decided on would be ‘party’ to the decision;
	a trustee who received notice of the meeting, provided that this stated clearly that amongst the purposes of the meeting would be the passing of a resolution authorising application to us for the Scheme, would be ‘privy’ to the application; or
	a trustee who received a copy of the resolution for consideration in accordance with a provision of the governing document of the charity would be ‘privy’ to the application, as would one who received a copy of the minutes after the meeting. (This will apply where the governing document allows trustees to take decisions without having to attend a meeting.)
	Non privy trustees
	Any trustee who cannot be regarded as party or privy to an application for a Scheme is ‘non-privy’.
	Use of terms
	We should refer to being involved in the decision, or having or not having, prior knowledge of the decision when corresponding externally rather than using the terms ‘party’, ‘privy’ or ‘non privy’. We should not use the terms ‘privy’ and ‘non privy’ in letters to correspondents without explanation (unless an explanation is clearly unnecessary).

	3.3 Identification of non-privy trustees
	All cases
	The following issues will be relevant in deciding whether or not there are non-privy trustees:
	the circumstances in which a Scheme is being made;
	the method of application;
	the constitution of the charity and of the trustee body; and
	the purpose of the Scheme.
	When we issue an application, we should ask for the names and addresses of any trustees who were not party or privy to the decision to apply for the Scheme. The list should include any trustees appointed since that decision was taken.
	Small charities
	Where we accept an application under the special arrangements for small charities, any trustee who does not sign the application will be non-privy.
	Application not by the charity
	Where we accept an application from one or more trustees, where there are insufficient duly appointed trustees to transact the business of the charity, all the last known trustees (if any) should be sent a non-privy notice. Where we accept an application from the Attorney General, or proceed on the basis of unreasonable refusal to apply for a Scheme (s.16(6)), all the trustees should be sent non-privy notices.
	Scheme of our own motion
	Where we make a Scheme of our own motion (s.18(2)(ii) of the 1993 act), we must give formal notice of our intention to make a Scheme to all trustees (s.18(12)).
	We should obtain their names and addresses from the correspondent at the earliest opportunity, and when notices of the Scheme are sent for publication, we should confirm that there have been no changes.

	3.4 Period of personal notice under s.16(9) of the 1993 Act
	The Act does not specify any period for notifying non privy trustees of our intention to make a Scheme. For trustees who know nothing about the Scheme (not privy) our policy is to regard the notice period as one month as this is considered to be a reasonable length of time.
	We should give notice in writing and the letter should include a brief description of the Scheme provisions. It should be addressed to the trustee’s last known address in the UK and we need not attempt to obtain a later address if the letter does not reach him or her. (We do not have a duty to notify trustees who cannot be found or have no address in the UK). If we do not receive a reply, we need take no further action.

	3.5 Personal notice – s.20A of the 1993 Act
	S.20A of the 1993 Act provides that a charity trustee, trustee for a charity, officer, agent or employee of the charity who is to be removed from office by Order without their consent must be given at least one month’s notice of the making of the Order unless he or she cannot be found or has no known address in the UK. The notice must invite representations on the proposal from the person concerned within a specified time limit.
	It may often be convenient to ask the person being removed from office to give consent. However, in the case of a charity trustee, consent cannot be inferred simply from the fact that he or she may have been involved in making the application for the Order. That involvement does not necessarily mean that he or she consents to everything which the Scheme will do. If there is no evidence of consent, the person concerned has to be given notice. We should do this in writing. The letter should:
	include a brief description of the Order’s provisions;
	make it clear that the Scheme will abolish the office(s) stated, held by the recipient;
	contain a specific invitation to send representations to us within a stated time limit. (The time limit does not have to be one month – it cannot be less - but this is the period which should usually be stated.)
	The notice should be addressed to the individual’s last known address in the UK. We need not attempt to obtain a later address if the letter does not reach him or her. If we do not receive a reply, we need take no further action.
	Schemes that abolish the office of trustee are not caught by this section. Abolishing the office of trustee is not removal or discharge of a trustee even if the practical effect is that the person who holds the office that is abolished is no longer a trustee as a result. If the trustee has not been privy to the application for a Scheme abolishing his or her office he or she is entitled to be given personal notice of our intention to make the Scheme under section 16(9). The trustee is also entitled to make representations to us about it like any other member of the public.
	Where someone stops being a trustee because a Scheme is made to transfer the title to charity land to the Official Custodian, they are not thereby removed from office.

4. Posting the draft Scheme on the website
	If we have taken a decision to give public notice of our intention to make a Scheme or Order, unless there are good reasons not to do so, we should post the draft on our website at the same time.
	Before doing this, the case officer should check that:
	there are no trustee addresses in the draft Scheme; and
	if trustees are named in the Scheme, there is a separate list of names and addresses on the case file to take account of our data protection responsibilities.
	Caseworkers are able to upload the Scheme onto Connect (and the website) via the ‘Connect Admin’ link on the left hand bar of the home page. Before doing this for the first time a caseworker must apply to the IS Service Desk for permission, which, once given, does not lapse. The system allows the user to enter the details of the draft Scheme onto the database which then automatically converts the draft Scheme to a pdf document, which is available to the public on the website the following day. The caseworker will be prompted to input the following information:
	(a) the charity number;
	(b) the charity name;
	(c) the type of draft Scheme, ie whether it will;
	modernise or broaden the objects;
	merge or amalgamate charities;
	enhance governance; or
	confer powers.
		(These are the descriptions that will appear on the website. Choose one of them. A Scheme varying administrative provisions will, for instance, enhance governance.);
	(d) the location of the charity;
	(e) the status of the Scheme, ie confirmation that it is a draft Scheme;
	(f) a description of the Scheme; the caseworker should write a short sentence setting out what the Scheme will do;
	(g) the case number; and
	(h) the location of the office handling the case.
	The Scheme will automatically be removed from Connect and the website one month after it was uploaded. However, the formal publication period will not expire until one month after the trustees publish their notices.(see 2.1.4)
	Note: If any amendments are made to the draft Scheme after this has been published on the website the case officer must amend the web version accordingly.
	Draft Schemes must not be published on the website if we have decided not to give public notice.

5. Consultation
	5.1 Registered Social Landlords 5.2 Charities with umbrella bodies such as almshouse charities

	5.1 Registered Social Landlords
	When a Registered Social Landlord (RSL) approaches us for a change of objects we are under a legal obligation to inform the Tenant Services Authority of this fact. This requirement also covers almshouse charities which are RSLs.
	Section 213 of the Housing and Regeneration Act 2008 states: ‘An amendment of the charity’s objects is effective only if the Charity Commission has first consented. Before giving consent the Charity Commission must consult the regulator.’
	Failure to inform the Tenant Services Authority before we make a Scheme for an RSL could invalidate the Scheme.
	We should allow a minimum of one month to consult the Tenant Services Authority.

	5.2 Charities with umbrella bodies such as almshouse charities
	Where we are aware that the charity is a member of a well known umbrella body we may have a memorandum of understanding with the umbrella body.
	One organisation we have an agreement with is the National Association of Almshouses (also known as the Almshouse Association). For almshouses we should send the Association a copy of the Scheme if it alters the objects of the almshouse charity or authorises the sale and replacement of almshouses.
	We should allow a minimum of one month to consult the Almshouse Association.
	See OG 65 for more details on almshouse charities.
	We have no definitive list of organisations with whom we have agreements or memorandums of association. If the caseworker thinks there may be such an agreement involving a body of which the charity in question is a member, they should check with Compliance and/or Policy who are currently developing a number of them.

6. Confirmation of position by trustees
	Once the necessary notices have been displayed for the relevant period and/or published, the trustees must confirm that public notice has taken place. The trustees will usually do this by submitting a completed declaration form 1161E which we send out with the notices.

7. Representations and objections
	7.1 Dealing with requests for copies of draft Scheme or Order 7.2 Statutory obligation to consider representations 7.3 Dealing with objections 7.4 Action to take once objections and representations have been dealt with

	7.1 Dealing with requests for copies of a draft Scheme or Order
	Copies of the draft Scheme should be sent or emailed without charge to anyone who requests one.

	7.2 Statutory obligation to consider representations
	Before signing a Scheme, we are obliged by law, where we have given public notice of our proposals, to consider and deal with all representations and objections received during the stated period of public notice (sections 20(5) and 20A(6) of the 1993 Act).
	This is vital. Under section 89 of the 1993 Act, we can only discharge Schemes or Orders under limited circumstances. Having to make a new Scheme or Order to deal with our mistake is a waste of resources and impacts on the reputation of the Commission.

	7.3 Dealing with objections
	Representations made in response to public notice of our intention to make a Scheme or Order (under s.20 or 20A of the 1993 Act). If the representations appear to be based on some misunderstanding of what is being proposed, we should contact the objector explaining the true position. All other representations or objections must be referred to the Final Decision and Tribunal Team (FDTT); this is regardless of whether or not we think the objection has merit. FDTT will decide how to take the matter forward in accordance with the final decision procedures.
	Guidance about how to deal with representations is set out in OG 4 – Dealing with representations in response to public notices.

	7.4 Action to take once objections and representations have been dealt with
	Once all objections and representations have been dealt with satisfactorily (and assuming the agreed publicity period (if any) has passed and any personal notices dispatched at least one month earlier) we can prepare the Scheme or Order for signing. Even if changes have been made as a result of representations received, we do not have to give further notice before the Scheme is signed. However, there may be cases (especially where the amendments are significant) where this will be desirable.

Glossary of Terms used in this Guidance
	1993 Act
	2006 Act
	ecclesiastical charity
	Housing Corporation
	local charity
	Tenant Services Authority
	trustees
	trustee for a charity

Index to further related information

In this section...

Contents

1. Introduction

2. Public notice and representations

3. Personal notices for Schemes and Orders made under s16 of the 1993 Act

4. Posting the draft Scheme on the website

5. Consultation

6. Confirmation of position by trustees

7. Representations and objections

Glossary of Terms used in this Guidance