OPERATIONAL GUIDANCE

MANAGEMENT OF VILLAGE HALLS

TRUSTEESHIP

OG 68 B2-25 February 2002

Purpose: This guidance sets out the roles and responsibilities of the different participants in the administration of a village hall.

Divisional responsibility

For action:

Charity Support Division

For information:

All operational divisions

Contents

1. The management committee
2. Local Authority as sole trustee
3. Nominees and Custodian trustees including the Official Custodian for Charities

Meaning of expressions - list of Glossary terms used in this Guidance
Index to further related information

1. The management committee

1.1 The composition of the committee
1.2 User trustees
1.3 Appointed members
1.4 Elected members
1.5 Co-opted members
1.6 Imbalance in the composition of the committee

1.1 The composition of the committee

Village halls are usually run by a management committee. The composition of that committee will be set out in the governing document and normally includes:

• appointed members (previously known as representative members);

• elected members; and

• co-opted (previously known as non-official members).

These members are the trustees and are responsible for the management and administration of the charity.

Very occasionally we may find a village hall run by a self-perpetuating body of trustees. This usually means that there are no elected or nominated trustees, instead the trustees appoint new trustees to replace retiring ones. We cannot insist that such bodies change to a committee type structure, but if we are making a Scheme for a village hall with such a trustee body, we would certainly ask the trustees to consider the option of changing, particularly where there are problems with usage or attracting new trustees.

1.2 User Trustees

The legal principle that a trustee should not benefit personally from his or her position as a trustee does not prevent a charity trustee of a village hall, which is for the benefit of the whole community, from enjoying the usual benefits of that charity, as a member of the community. Further information about beneficiaries who become trustees can be found in leaflet CC24 Users on Board.

1.3 Appointed members

The governing document will usually name the organisations initially entitled to appoint members to the management committee. Because the village hall is intended for use by the whole community there could be a wide cross-section of organisations wishing to appoint members. Information about changing provisions for appointed members within the governing document can be found in section 3 of OG 68 B1.

Groups who use the facilities on a one-off or occasional basis should not expect to be included but those using the hall on a regular basis should be represented.

Where the appointing organisation is not established with RCA objects, its appointee could find that their duty to act in the hall's interests may conflict with their own interests or those of the organisation appointing them. This is most likely to be the case where the organisation concerned is a profit making one.

We should not therefore readily agree to the inclusion of such organisations where we are involved in agreeing the constitution of a hall's committee or advising on the issue of composition of the committee. There are however other organisations whose purposes are not fully in line with the RCA but, nevertheless, have purposes which have a wider benefit to the community and might therefore be appropriate for inclusion. Examples of these might be parish councils (or, in Wales, community councils), Parochial Church Councils or other religious groups and organisations with educational purposes such as an IT Resource Centre.

The usual requirements for appointed members are:

• that only one member is appointed by each organisation listed in the schedule to the governing document, unless very few organisations use the hall, when provision should be made for an equal number of appointments per organisation;

• any appointment must be made according to the practice of the appointing body;

• an appointment should not be made more than two months before the annual general meeting (ie when the vacancy arises).

• The appointment will be effective from the latter of:

• the end of the annual general meeting; or

• the date on which the committee or their secretary or clerk are informed of the appointment.

• the person being appointed need not be a member of the relevant appointing body.

The appointed member must always act in the best interests of the village hall charity, rather than the narrower interests of the users they represent. Such members need to be aware of their potential conflict of interest and should absent themselves from those parts of committee meetings where issues relating to the interests of their appointing organisation are being discussed. This does not, of course, preclude the organisation from making representations to the committee. Where a matter affects all organisations equally, such as an across the board increase in hire charges, it would obviously not be practical for those affected to withdraw if this meant the meeting were to be inquorate. In these circumstances non-withdrawal would be acceptable to us, as individual organisations would be treated equally.

The committee does not have the power to reject a particular nomination from an organisation. However this would not apply where the individual is under eighteen or is disqualified for being a trustee under section 72 of the 1993 Act.

1.4 Elected members

Elected members are those people who come forward in their own right to serve as committee members. They are appointed by the annual general meeting, usually by show of hands. We recommend that the number of elected members should be less than the number of representative members as this is a factor taken into consideration by grant makers and may help to prevent one particular faction taking control of the committee.

1.5 Co-opted members

If the committee decides that certain people may be useful to the running of the charity, perhaps because they have a special skill or have past experience as a trustee, then they can be co-opted to join the committee. As co-opted members, they are elected by the committee and not the annual general meeting. Our own model Scheme allows for two co-opted members. Where other governing documents allow the appointment of co-opted trustees but do not stipulate the number, co-opted members should not exceed one third of the members of the committee. Whilst this is not a legal requirement it does ensure that the democratic balance of the committee is maintained and that grant givers can remain satisfied that those using the hall have a proper say in its running.

1.6 Imbalance in the composition of the committee

The organisations who appoint members to the committee will normally be listed in the deed or Scheme itself or in a schedule. Over time the organisations using the hall can change and some may go out of existence. Older deeds and Schemes can lack the power to remove the right of moribund or defunct organisations to appoint members to the committee or even appoint new organisations without our approval. If the number of active organisations is less than the original number it could lead to a situation where the number of elected members exceed the number of appointed members. It is possible that this situation could jeopardise chances of receiving grant aid. See OG 68 B1 section 3 where the charity has no power in its governing document to change the composition of the management committee.

2. Local Authority as sole trustee

Under section 139(1) of the Local Government Act 1972, local authorities are entitled to act as trustees for the benefit of the inhabitants of their area (except for ecclesiastical charities or those for the relief of poverty) - see OG 56 A1.

We have, in the past, been willing to appoint a local authority as sole trustee. Whilst there have been advantages to this, there have also been drawbacks. These are discussed further in Decisions of the Charity Commissioners Volume 1 section 9.

It is preferable not to appoint the local authority as sole trustee as there can be conflicting demands between a local authority in its statutory capacity and that in its role as trustee. This will not however preclude the appointment of the local authority as a nominee or custodian trustee. OG 56 Local Authorities and Trustees provides further information on this topic.

3. Nominees and Custodian trustees including the Official Custodian for Charities

There is a general rule that title to charity property should be held in the joint names of the charity trustees. It is often difficult to maintain this position in the case of village halls and there are usually provisions in the governing document which allow the trustees to depart from this general rule. The governing document may contain explicit provisions about the appointment of a custodian trustee, but there are also statutory provisions relating to the appointment of custodian trustees which may be used even if the governing document says nothing. Alternatively, the governing document may require the people in whom the village hall is originally vested, to apply to us to vest the village hall in the Official Custodian. A further alternative may be where the governing document may authorise the appointment of individual nominees to hold the title to the village hall premises.

Village halls present a particular difficulty because their charity trustees are liable to change on an annual basis. If the charity does not use nominees or custodian trustees, unless proper deeds of retirement/appointment are made on every resignation or appointment, the title to the charity property will remain in the names of those in whom it was last vested, even though they may have long since ceased to be a charity trustees. Where charity trustees are appointed by resolution at a meeting a memorandum of appointment/discharge will, if the provisions of section 83(1) of Charities Act 1993 are followed, have the same effect as deeds of retirement/discharge (ie the property will be vested in the new trustees to the exclusion of the former trustees).

Modern model deeds usually provide for the title to property to be vested in one of the following:

• the Official Custodian for Charities, by applying to us for an order after the charity has been brought into existence;

• the parish council or some other corporate body qualified to act as a custodian trustee; or

• a group of private individuals specifically appointed to act as nominees.

The advantage to the charity of using the Official Custodian is that it is a one off appointment thereby negating the need for further appointments. The Official Custodian plays no part in the management of the charity and his services are free.

A parish council can be appointed as a custodian trustee. A parish council would have no powers of management but it could be represented on the management committee as a local organisation.

Private individuals as nominees have the disadvantage that when they retire, move away or die, they need to be replaced. The expense, time and formality involved often result in this requirement being overlooked. It is also preferable that these individuals should not be members of the management committee to avoid confusion over their roles.

The Trustee Act 2000 also makes provision for appointment of nominees in addition to any specific provisions which exist in a charity's governing document. The requirements of this Act as to the identity of the people who may be appointed will normally mean that the use of this power is not appropriate for village halls.

The following words and phrases are defined in the Glossary of Terms:

•
•

trustee
official custodian for charities

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