Cabinet Sub-Committee (Hitchin Gymnasium and Workmans Hall Trust) Minutes

Date:
Tuesday, 27th July, 2010
Time:
6.30pm
Place:
Committee Room 3, Council Offices, Gernon Road, Letchworth Garden City
 
 

Attendance Details

Present:
Councillor Bernard Lovewell (Chairman), Councillor I.J. Knighton and Councillor Mrs C.P.A. Strong.
In attendance:
Strategic Director of Customer Services, Head of Revenues and Benefits, Legal Advisor, Accountancy Manager and Committee & Member Services Manager.
Also Present:
1 member of the public
Item Description/Decision
PART I
1 APOLOGIES FOR ABSENCE
There were no apologies for absence.
2 MINUTES
RESOLVED: That the Minutes of the meeting of the Sub-Committee held on 17 May 2010 be taken as read, approved and signed by the Chairman as a correct record.
3 NOTIFICATION OF OTHER BUSINESS
There was no notification of other business.
4 CHAIRMAN'S ANNOUNCEMENTS
The Chairman reminded Members that, in line with the Code of Conduct, any Declarations of Interest needed to be declared immediately prior to the item in question.
5 PUBLIC PARTICIPATION
There was no public participation.
6 MANAGEMENT AGREEMENT
The Head of Revenues and Benefits presented a report in respect of some suggested amendments to the Management Agreement, as proposed by Cabinet at its meeting held on 15 June 2010. The following appendix was submitted with the report:

Appendix 1 - Management Agreement proposed by Cabinet.

The Head of Revenues and Benefits advised that Cabinet, at its meeting held on 15 June 2010, had considered the proposed Management Agreement for the parts of Hitchin Town Hall which were the responsibility of the Trust. Cabinet had recommended the following change to the Agreement:

The removal of the following bullet points in Section 2.1:

• On an annual basis, income generated from the Gymnasium and Workman’s Hall Trust facilities up to but not exceeding the cost of managing and maintaining the said facilities, shall belong to North Hertfordshire District Council; and

• On an annual basis, income generated from the Gymnasium and Workman’s Hall Trust facilities, in excess of the cost of managing and maintaining the said facilities, shall belong to the Gymnasium and Workman’s Hall Trust,

And their replacement with a single bullet point of:

• To be calculated on a bi-annual basis income generated from the Gymnasium and Workman's Hall Trust facilities, up to but not exceeding cost of managing and maintaining the said facilities, shall belong to North Hertfordshire District Council. Any surplus income in excess of the costs for the two years in question shall belong to the Workman's Halls and Gymnasium Trust; and

The Sub-Committee was advised that, in proposing this change, Cabinet was seeking to safeguard Council Tax Payers against subsidising the maintenance and upkeep of Trust property and not being able to recoup its previous subsidy, should the Trust property return a profit in any one year. At present, there was no reason to believe that the Trust property was likely to return a profit in any year, and the Council was currently subsidising its running costs by around £35,000 per annum. However, it was possible that a one-off event or series of events in any one year could result in a profit, which the Cabinet believed should first be used to offset previous subsidies given by the Council.

Members were informed that Officers representing the Trust pointed out to Officers representing the Council that should the Council accrue the value of the subsidies provided year-on-year, at the current rate within less than five years, the Trust would be technically insolvent as its liabilities would exceed its assets, which in essence consisted of only the building, currently valued at less than £150,000 and depreciating in value each year. To prevent this from happening, Cabinet had proposed that this was calculated on a bi-annual basis only and that any subsidies more than two years old were not subject to any repayment from potential profits. Officers believed that this was a reasonable approach, which safeguarded the interest of Council Tax Payers and, at the same time, protected the Trust from potential insolvency and ensured the continuance of the Council’s subsidy. This amendment was therefore recommended to the Sub-Committee.

The Sub-Committee was supportive of this proposed amendment, but pointed out that the word “bi-annual” was incorrect, and should be replaced by the word “biennial”.

The Head of Revenues and Benefits stated that a second amendment proposed by Cabinet to the Agreement was in respect of the following additional review clause:

“13. Review

This Management Agreement between North Hertfordshire District Council and Hitchin Gymnasium and Workman’s Hall Trust shall be the subject of a review:
(i) at any time with the mutual agreement of both parties; or
(ii) within three months written notice by either party to the other.”

The Sub-Committee supported the inclusion of this additional clause.

RESOLVED: That the Management Agreement, as attached at Appendix 1 to the report, and amended to include replacement of the word “bi-annual” with “biennial” in the first line of the fourth bullet point of Section 2.1 of the document, be agreed.

REASON FOR DECISION: To enable the Trust to move forward towards registration with the Charity Commission; and to safeguard the Trust’s future financial position.
7 THE 2009/10 STATEMENT OF ACCOUNTS FOR HITCHIN TOWN HALL GYMNASIUM AND WORKMANS HALL TRUST -
POST INDEPENDENT EXAMINATION

The Accountancy Manager presented a report in respect of the outcome of the independent examination of the Trust’s Statement of Accounts for 2009/10. The following appendices were submitted with the report:

Appendix A - Independent Examiner’s report;
Appendix B - Final Statement of Accounts 2009/10
Appendix C - Final Annual Report 2009/10

The Accountancy Manager advised that the examination of the Trust accounts was completed on 25 June 2010 by the appointed auditor, Gursh Bains CPFA, the Audit Manager at Stevenage Borough Council, who had experience of auditing Charity Accounts in previous roles at the Audit Commission. The examination did not identify any issues which needed to be bought to the attention to the Trustees and the examiner’s report was attached at Appendix A to the report.

The Accountancy Manager stated that, during the course of the examination, a number of minor errors, mostly of a presentational nature, were identified by the Auditor. All of these errors had been amended in the revised version of the statement of accounts attached at Appendix B to the report following discussion with the Accountancy Manager. A summary of the amendments was provided in Table 1 of the report.

The Sub-Committee was pleased to note that the cost of the independent examination had amounted to £450, some £1,050 less than the original estimate for the work.

The Accountancy Manager reported that he had just received confirmation from Her Majesty’s Revenues and Customs that the officers had been correct in their treatment of Value Added Tax in relation to the accounts.

RESOLVED: That the points raised by the independent examiner on the Statement of Accounts for 2009/10 be noted, prior to the approval of the Accounts and Annual Report by the Chairman.

REASON FOR DECISION: To comply with requirements for registration of the Trust with the Charity Commission.
Published on Wednesday, 11th August, 2010
Start - 6.30pm
End - 6.52pm