The report is a guide to the alternative means of delivering local authority services with particular reference to charitable trusts. It was written by Simon Randall and Joanna Bussell of Lawrence Graham's Local and Public Authority Unit, which Randall heads up.
The increasing costs of maintaining popular but costly public services - such as sports centres, art collections, museums and residential homes for the elderly - can be met by transferring some council amenities to the status of charitable trusts, according to the report. Such transfer has helped some hard-pressed authorities to maintain and even extend services that they could not afford to fund before.
Lawrence Graham has in recent months advised a number of Scottish local authorities on the possibility of transferring amenities to charitable status. The Unit has assisted in a number of transfers to date including a tourist centre, a theatre and public parks.
The report identifies the types of organisations eligible for 'repositioning' and outlines the many financial and administrative benefits to be gained from establishing a charitable trust, including fiscal advantages such as exemption from income tax, corporation tax and capital gains tax. Other benefits include tax relief on charitable donations and increased chances of obtaining national lottery funding.
The procedure for setting up a charity in Scotland is examined in detail.
The report takes into consideration the transfer of land and other assets and the necessary undertakings in terms of staff and trading. It also refers to the important issues of community involvement and better management.
Commenting on the trend in favour of establishing charitable trusts,
Randall explains: 'The role of the legal advisor has become far wider in dealing with projects of this kind. Our commercial understanding and experience are increasingly sought, because we have witnessed the sort of savings that local authorities can make by setting up charitable trusts. We find ourselves often encouraging local authorities to implement fresh feasibility studies to establish where and when these projects will work.'
Randall also believes that 'the establishment of charitable trusts
encourages a more entrepreneurial approach to leisure centres, museums and other organisations that continuously benefit from ongoing enhancement and development.'
With reference to the report, Randall stated: 'The report is intended to be a useful source document for any local authority considering alternative means of delivering their services. The situation of each local authority will be different and specific legal advice will be required in each situation. Such advice would of course be confirmed by Scottish lawyers.
Lawrence Graham's Local & Public Authority Unit, which coordinates the
firm's legal expertise for the specific needs of local authorities, is one of the largest such units in the country. It has recently been enhanced by the arrival of Carl Hopkins, acknowledged to be the top UK specialist in urban regeneration. Urban regeneration plays an increasingly important part in the trend towards not-for-profit or charitable trust developments.
For a copy of the report 'Charitable Trusts for Local Authorities in
Scotland: Key Legal and Practical Issues' contact Lawrence Graham's
Local and Public Authority Unit on 0171 379-0000. The price of the report is£5.