At its meeting on August 6, the authority’s cabinet agreed to underwrite £66,077 of payments previously awarded to third-party community and voluntary organisations by the Northumberland Children’s Trust.
This is subject to the money being repaid once the Trust is able to access the funds – held on its behalf by its investment managers and worth around £1.3million – which is currently not possible following its de-registration by the Charities Commission after accounts were not submitted.
The Northumberland Children’s Trust was set up to benefit young people in Northumberland and Tyneside using the proceeds of the sale of the former Longhirst Approved School. It operates under the provisions of a deed made in 1996, which amended the original 1948 agreement that set up the school.
Brewin Dolphin manages the fund on the Trust’s behalf and it has a current valuation of around £1.3million. It invests the fund in order to achieve returns.
The Trust has a board of trustees, which considers and approves grant payments, and it is supported from an administrative and finance perspective by the local authority, with the legal services manager acting as honorary secretary and the council leader having an ex officio position as one of the trustees; the others are private individuals.
Until earlier this year, the trust had been registered with the Charity Commission, however, ‘following an administrative oversight with regards to a failure to submit accounts, the Trust had been de-registered which, under prevailing investment rules, prevented Brewin Dolphin from making investment decisions for the Trust and, most critically, realising cash in order that the Trust might make grant awards’.
The report to councillors further explains that when the Trust applied to re-register, ‘a more fundamental issue in relation to the basis on which it was understood that the Trust was registered as a charity from 1996’ was raised, sparking the Commission to call for a fresh application.
The council’s legal services manager has written to the Commission challenging its position and seeking a review, but a promised response has yet to be received.
However, ‘advice received from Brewin Dolphin suggests that in the event of a failure to obtain charitable status, the Trust could access their funds through a process of incorporation’.
Coun Nick Oliver, the cabinet member for corporate services, told the meeting that council officers ‘are satisfied it will be resolved positively’.