OG 562 Management of Village Halls

Last reviewed:
14 March 2012
Last updated:
30 June 2016

Policy Statement/Overview

Village halls play a major part in providing a place for community activities. In the majority of cases village hall management committees are well able to manage their responsibilities, however, there are particular issues where the trustees will need to seek advice or permissions from us. This guidance provides the background of why village halls are charitable and particular issues about their objects and administration where we will need to engage with the trustees.

This guidance is supplemented by Research Report RS9 Village Halls and Community Centres and Review of the Register report RR 2 Promotion of Urban and Rural Regeneration.

Summary of the guidance

Casework guidance concentrates on who runs the village hall and the issues they made need to discuss with us. This is supplemented by an information sheet for trustees, which we publish on our website.

The legal and policy framework sets out the charitable nature of village halls, the legal basis for amending imperfect trust and administrative provisions in governing documents and disposals of village halls or parts of their property.

A table showing organisations that can provide help or grant funding for village halls can be found under the Charts tab.

 

OG Contents (Site map)

Casework Guidance

Most issues faced by village halls will be dealt with by the management committee as trustees of the hall. Our involvement will usually be required where there are more difficult issues that require our consent or where we need to make a Scheme. Those issues are reflected in the guidance below and in the Legal and Policy Overview. 

Trustees with general queries can be directed towards our web site where we have general guidance for small charities and an information sheet to help management committees with the day-to-day issues that they might encounter. Our regulatory report Village Halls and Community Centres RS9 looks at problems faced by village halls. Trustees may find valuable insights and case examples in the report which is available on our website.

B1 Trusteeship

Before looking at the issues faced in the actual running of village halls we may need to ensure that the trustees are aware of their proper roles and responsibilities. 

B1.1 The composition of the committee

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

  • appointed members (previously known as representative members);
  • elected members; and
  • co-opted members (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 who hold the land under the original conveyance. This usually means that there is no management committee that includes elected or appointed trustees, instead the trustees appoint new trustees to replace retiring ones. We cannot insist that those trustees change to a committee type structure, but if we are making a Scheme for a village hall with this type of 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.

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B1.2 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 community as a whole) from using the hall in the same way as any other member of the community. Further information about beneficiaries who are also trustees can be found in CC24 Users on Board.

B1.3 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 - see section B5.2 with regard to the charitable nature of those groups. Our policy towards making changes of administrative provisions can be found in E3.

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.

All appointed members are required to act in the best interests of the charity. Some may find that their duty to act in the hall's interest may conflict with their own personal interest or those of the appointing organisation. This is most likely to happen where the organisation concerned is a profit making one. Therefore, where we are involved in agreeing the composition of a village hall committee or advising on the issue, we should not readily agree to the inclusion of appointees whose personal interests are likely to conflict.

However, there are other organisations whose purposes extend beyond recreation but still have purposes which have a wider benefit to the community and might therefore be appropriate for inclusion. Examples 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 facility.

The usual requirements for appointed members are:

  • that only one member is appointed by each organisation listed in the governing document or its schedule, 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 whichever is the later 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.

Where there is a large number of user groups, which could make the management committee unwieldy, provision can be made for those groups to groups to meet and appoint a specified number of members to the committee.

The appointed member must always act in the best interest 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, all appointed members would be on equal terms and it would make no sense for them to withdraw and could make the meeting inquorate.

The committee does not usually have the power to reject a particular nomination from an organisation apart from where the nominated individual is under eighteen or is disqualified from being a trustee under section 178 of the Charities Act. There is no legal prohibition which would prevent such a provision being included in a governing document and the management committee may wish to reserve power to remove a disruptive appointed member.

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B1.4 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 a 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 group taking control of the committee. 

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B1.5 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, the 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 the running.

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B1.6 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. Our approach to rectify these matters is to advise the management committee to use section 280 provisions of the Charities Act - see section E3.

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B1.7 Local authority as sole trustee

We have been willing in the past to appoint a local authority as sole trustee. Whilst there have been advantages to this, there have also been drawbacks. 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 in its role as trustee. However, this does not preclude the appointment of the local authority as a nominee or custodian trustee.

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B1.8 Nominees and custodian trustees including the Official Custodian for Charities

Charity trustees of village halls are liable to change on an annual basis. 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 because of the annual changes and there are usually provisions in the governing document which allow the trustees to depart from the general rule. The governing document may contain explicit provisions about the appointment of a custodian trustee, but there are also statutory provisions about the appointment of custodian trustees which may be used even if the governing document says nothing. Alternatively the governing document may require the original named custodian trustee or nominees to apply to vest the village hall with 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.

If the charity does not use nominees or a custodian trustee it will need to take proper account of the retirement and appointment of each of the charity trustees. If it doesn't 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 trustee. Where charity trustees are appointed by a resolution at a meeting the provisions of section 334(1) & (2) allows that a memorandum of appointment or discharge can be used to vest the property in the new charity trustees and discharge the former trustees. This saves the charity trustees from having to execute formal deeds of appointment or retirement which would otherwise be required.   

Modern model deeds usually provide for 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 any other corporate body qualified to act as a custodian trustee; or
  • a group of private individuals specifically appointed to act as nominees.

The advantage of using the Official Custodian is that it is a one-off appointment thereby avoiding 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. It would have no powers of management in that role 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 nominee provisions of the Trustee Act 2000 will not usually be appropriate for village halls as the rules applying to those provisions would usually be overly burdensome for village hall charities. 

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B2 Action we take where there are multiple governing documents or defective trusts

Some village halls, particularly those established before the 1950s, may not have standard trusts. This does not mean necessarily that those trusts are defective; they may be exclusively charitable and cause no problems for those administering the charity. If this is the case then there is no reason to change them. However, problems can arise in cases where there is more than one governing document, where the trusts are imperfect or where administration functions require approval from the Charity Commission.

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B2.1 Village halls that have more than one governing document or more than one charity for the purpose of the same village hall.

Some village halls have two separate documents, one which declares trusts over land and buildings and another which establishes a constitution for its administration and management. (There can also be additional deeds where more land has been acquired on the same trusts.)

In most cases the land and buildings will simply be held by individuals (or by the Official Custodian for Charities or by a Parish Council) acting as custodian trustee or nominee of the village hall charity.  Problems can arise where the conveyance or lease also gives certain administrative powers to individuals who are distinct from the committee that actually manages the village hall, for instance, powers in connection with the sale of the village hall. In such cases those individuals will be more than mere nominees. It is important to clarify who the charity trustees are and in each case what their powers are.

lawyer_refer

You should seek legal advice if there are doubts about the powers and duties arising from the respective governing documents.

 

It will be rare for there to be more than one charity (as distinct from more than one governing document) associated with the operation of a village hall. However, there have been examples where the land on which a village hall is built is held by charity A on trust that the village hall is managed by a committee of management by charity B. Generally such charities should account separately. Although they are both associated with the same service, typically there will not be a sufficient degree of administrative interdependence to permit one to be treated as a special trust of the other.

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 B2.2 Imperfect trusts and the Charitable Trusts Validation Act 1954

Section E2 looks at the legal implications of imperfect trusts and when the Charitable Trusts Validation Act should be applied. It also confirms the need for legal advice.

Where the legal officer determines that the Act does apply and the application of the Act would be consistent with the way the charity operates then he or she will direct that the organisation should be registered (if it is not already). However, before registration of a new charity or amendment of the objects of an existing charity takes place we must get the trustees' agreement for the application of the Act and for the wording of the objects. That agreement must be in writing. Once registration takes place the Register of Charities will need to be noted that the Act has been applied.

lawyer_refer

   In the unlikely event that the trustees do not agree to the use of the Act or the wording of the objects refer to a legal officer.

 

In some cases the application of the Act may result in objects which cause confusion within the charity or would be inconsistent with the way the charity operates. In these circumstances we may wish to consider a Scheme to clarify the trusts.  

The legal officer should set out why:

  • the trusts are not wholly charitable; and
  • application of the Act would not achieve a satisfactory remedy to the situation.

The decision to make a Scheme should be taken in Operations following legal advice.

Where we decide to make a Scheme we should write to the trustees explaining:

  • that the objects in their governing documents are not wholly charitable as they stand; and
  • that we can apply the provision of the Act (in effect this means striking out words) but by doing this the objects do not correspond with use, so, for the purpose of clarity, a Scheme may be appropriate.

The letter should set out the proposals for the Scheme including any elements we consider necessary to modernise administrative provisions.

Once the Scheme is agreed the case can be referred for registration or amendment of the Register.

If we take a decision not to make a Scheme we will still need to reach agreement with the trustees about the wording of the objects before registration of the charity or amendment of the Register can take place.

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B3 Village halls and joint ventures with other types of charity

Sometimes it is mutually beneficial for a village hall charity to have property sharing arrangements with other charities. Because such arrangements will involve different types of charitable trusts they will usually be set up formally by Scheme unless the respective trusts allow for such arrangements.

 

B3.1 Village halls and recreation grounds

Section E5 sets out our policy for agreement for a Scheme amalgamating a village hall and recreation ground.

We have a model scheme for a joint recreation ground/village hall charity. However, before we offer such a Scheme we need to consider carefully the respective trusts and how they would need to be managed in a practical sense,.

In the case of an amalgamation:

  • Would separate financial and administrative arrangements need to apply?
  • Do trustees understand what they can or cannot do within the scope of the respective trusts?
  • Are the interests of both charities best served by the amalgamation?

Occasionally we may encounter circumstances where a village hall and recreational ground cannot be merged because of unusual provisions in the governing document that cannot be removed. Consequently we may have to keep the charities separate but give them a common committee of management - see case study in RS9 Village Halls and Community Centres

Recreation grounds by their very nature provide open space for outdoor recreation. Where a recreation ground wants to build a village hall on land subject to recreation ground trusts, the trustees will need to show that:

  • The land intended for a village hall would be surplus to requirements of the recreation ground.
  • The charitable activities of the recreation ground will not be put at risk by building a hall.

Alternatively, from a village hall perspective:

  • Village hall activities should not be disadvantaged by the activities and users of the recreation ground. The building of a village hall should not be there simply to service the needs of the recreation ground (eg use of facilities for changing, an area for viewing sport or a bar area only for those attending sports fixtures). consult

You should seek advice from a senior or more experienced caseworker if there are doubts about what is proposed or you consider that the interests of both charities are not properly balanced. 

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 B3.2 Village halls and church halls - Albemarle Schemes   

Section E6 sets out when we might agree to the use of a church hall as a village hall, otherwise known as an Albemarle Scheme.

Where we are approached for an Albemarle Scheme we need to be clear about who is approaching us and the interests they represent. The concerns of the village hall and the church hall may be quite different and it is important for us to be clear on the nature of the trusts under discussion. Before a scheme goes ahead we must be certain that the interests of both charities are properly served.  Other considerations include:

  • The Albemarle Scheme must be made before arrangements can go ahead  for leasing the church hall to the village hall charity.  
  • Where a new village hall charity is being formed we recommend that it should use the ACRE lease - Model B as its governing document.
  • Where a village hall charity already exists the ACRE lease is not appropriate as the charity will already have a governing document. In these circumstances a lease is required to allow the village hall to use the premises for its purposes, rather than setting up a charity by means of a lease. Care will be needed to ensure the trusts stated in the lease concur with those in the original governing document so that a separate trust is not set up.

Additionally, the village hall charity will need to recognise that if the church hall charity no longer has any need for the hall for its own purposes then the trustees of the church hall are under a duty to sell the hall for the best price possible; this might not always be to the village hall charity. The sale of the church hall would leave the village hall charity with the option of finding new premises which could be leased or bought and settled on the existing trusts, or, wind the charity up and distribute the assets in accordance with the trusts.

The question of lease renewals under Albemarle Schemes sometimes arise. Where the Schemes allows for lease renewal we do not need to be involved. Where there is no option for renewal the church hall trustees will need to come back to us to consider whether we can vary the provisions of the Scheme if it is appropriate to grant a further lease. We will raise no objection to a further lease providing that the interests of both charities are met. 

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B3.3 Village halls and school premises

School facilities may also be made available for use as village halls with the aim of providing joint arrangements for community recreation facilities.  An example of when this might happen is where a village hall has been sold and the management committee look for alternative premises in which to run the activities. The form of agreement to do this can vary, we may need to provide a Scheme or the management committee may enter into a lease or other form of agreement. It is important to ensure that there are clear arrangements for sharing property and that the village hall's interests are taken into account properly.

lawyer_referLegal advice should be taken where we are approached to consider agreements to run village hall facilities in school premises.      

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B4 Disposals or charging of charity property and the spending and replacement of capital expenditure

B4.1 Disposals and capital replacement

There will be circumstances when village halls need to be sold or when trustees need to spend permanently endowed capital funds. Our policy is set out in section E7 of this guidance. The guidance on section 117 of the Charities Act for disposal of charity property can be found in OG 548

B4.2 Proposed loans or grants 

Proposals for loans or grants do not usually need our authority - our guidance on this is set out in OG22 B1. Advice for trustees about what they must do when they propose to enter an agreement for a loan or grant is contained in the information sheet on our website.

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B5 Issues concerned with using the village hall

B5.1 Area of benefit

The area of benefit of a village hall can sometimes give rise to problems or disagreements. The main difficulties with this issue tend to be;

  • the extent to which the hall may be used by the inhabitants of adjoining parishes (outside the area of benefit set out in the governing document);
  • whether inhabitants of adjoining parishes should be eligible to stand for election to the management committee;
  • whether inhabitants of adjoining parishes should be able to vote at annual general meetings.

A village hall exists to provide a facility for the locality in which it is situated, but, it is not always necessary for the area of benefit to be restricted to the civil parish in which it stands. For example:

  • Where a hall is situated near a parish boundary but is close to a village in another parish without a hall - it would make no sense to deny villagers from the adjoining parish the opportunity to use the hall. The aim should be to provide a facility for local inhabitants rather than disqualifying people from using the hall because they live on the wrong side of a parish boundary.

This calls for a pragmatic approach when defining areas of benefit that look also at emerging needs as well as past practice.

Where we prepare model Schemes we may want to introduce flexibility in defining the area of benefit, by use of:

  • "parish x and such area adjoining the parish of x as determined from time to time by the committee of management"; or
  • "the parish of x and the electoral wards of y and z as at [date]"

This can give more certainty about who the beneficiaries are, who would be eligible to stand for office and vote at elections, allows for a growing local population and is a better option to "surrounding neighbourhood", which can often lead to confusion or disagreement about what this term means. Defining a parish and electoral ward by date ensures that if boundary changes occur people will not find themselves outside of the catchment area for the charity.

Trustees should keep local population changes under review so that the village hall continues to be available to all local inhabitants. 

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B5.2 Whether all user groups need to be charitable in their own right

It is the provision of the village hall itself which is charitable; as a charity it provides a range of recreational activities. Each individual activity will not necessarily be charitable in its own right but may, nevertheless, improve the conditions of life for the public in the area of benefit.

Halls are used by many organisations known as user groups. Their activities are diverse and will cater for different sections of the community. Examples of user groups can include:

  • Mothers' and toddlers' groups.
  • Brownie Guide packs.
  • Badminton clubs.
  • Pensioners' luncheon clubs.
  • Bridge clubs.

Many more types of hobby or interest groups exist that use village halls. 

Some older trust provisions included "social contact" and "entertainment" as a charitable purpose but these were subsequently determined by Court not to be charitable and this led to the passing of the Charitable Trusts Validation Act. These imperfect trust provisions can sometimes cause confusion to the management committee about what activities may be permitted in the hall.

Under the Charites Act the village hall exists to provide premises for social welfare needs for the general public, or for those having specific need, in a particular area. In principle there is no objection to a village hall being used by individuals or groups for the purposes of social contact or entertainment but these activities are not charitable in their own right. Occasionally, the village hall committee might run a social event for the purpose of raising funds for the hall; again, we have no objection to events of this kind undertaken on an occasional basis.

Groups using the hall on a regular basis will usually have the right, under the terms of the governing document, to appoint a member of their group to the management committee of the hall. In their capacity as an appointed member of the committee they must act in the best interests of the village hall and not to further the interests of their particular group. The group will sometimes include people who live outside the area of benefit; this is not a problem providing that those individuals are in a minority and the group is substantially for the inhabitants of the area of benefit.

Not all organisations or individuals wishing to use the hall will come within the scope of the Charities Act. They may have some of the following characteristics:

  • the group or event is run for private profit of the organiser, for example a Weight Watchers' group, or the sale of clothes, carpets, art etc;
  • it is an event organised for private benefit, for example a private party or wedding reception, which are not recreational activities as contemplated by the Act;
  • the event or group meeting results in the hall being permanently occupied for the particular purpose so that it is not available to the public at large for charitable activities within the scope of the Act. This can also apply to activities which may be charitable but not within section 5 of the Charities Act , for instance an Information Technology Centre.  

It will be for the management committee to decide the times at which groups and organisations use the hall and what charge, if any, is made.

keypointsKey points for decisions on usage should take account of the following principles:

 

  • Any use falling outside the objects, such as private parties or commercial sales, should take place only where they do not interfere with the use of the hall for public benefit. 
  • With occasional bookings, the first call on the use of the hall would be for groups falling within the scope of section 5, although, it is recognised that circumstances may arise where pre-booked use by a non-user group may take precedence over a last minute request from a regular user group.
  • A fee at an ordinary commercial rate should be charged in respect of any use (including charitable use) falling outside the section 5.
  • Only where an organisation possesses objects that are consistent with the provisions of the Act can the management committee decide to forego a fee or charge a smaller fee.

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B6 Setting up other facilities in village halls 

A village hall can be the focal point for activities in a village. In some villages facilities such as sub-post offices and shops are closing and village halls are seen as a possible place where such activities can be revived or continued. Village halls are also seen as somewhere to site new activities such as information technology centres. 

Any proposals to provide non-recreational facilities at a village hall will need careful consideration. Usually village halls are established to provide a facility for recreational activity and these activities fall outside of that scope. Some village halls may have an additional object for educational purposes which might allow more scope for other facilities. In looking at other facilities much will depend on the way the facility is set up, who runs it and the extent to which the hall will be used. 

Questions that arise about this type of proposal focus mainly in the following areas:

  • whether private benefit accrues to those operating the facility;
  • the rules concerning charities and trading; and
  • the fact that the village hall may no longer be available for the object for which it was established - for example, there is a distinction between using the hall for a visiting doctor's surgery twice a week and a permanent facility occupying part of the hall.

When we are asked about village halls providing other facilities we need to ensure that we are as flexible as possible in enabling innovative schemes that have a clear public benefit as social and economic circumstances have changed considerably since village halls were first established.  

Village halls may also have a role as part of a rural regeneration scheme, which again, are set up with objects and activities that are different to those of village halls. Such schemes allow for the provision of recreational facilities and the village hall fit into such plans. They would, however, need to be considered carefully to ensure that existing activities would not be compromised.

Our guidance Promotion of Urban and Rural Regeneration RR2 sets out our requirements for such projects. Providing Alcohol on Charity Premises CC27 may also be of help. 

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Charts

C1 Organisations that can help village halls

Organisation

Details

Function

Action with Communities in Rural England - ACRE

http://www.acre.org.uk/

Somerford Court
Somerford Road

Cirencester
Gloucestershire GL7 1TW

Tel: 01285 653477

Email: acre@acre.org.uk

ACRE is funded by government and its aim is to help develop and sustain vibrant rural communities. It does this through advocacy of rural needs with policy makers and networking and creating partnerships with those who work with rural communities giving advice and information, including the Rural Community Action Network (RCAN). 

Wales Council for Voluntary Action - WCVA

http://www.wcva.org.uk/

Baltic House
Mount Stuart Square
Cardiff Bay
Cardiff CF10 5FH
Helpdesk 0800 2888 329

Email: enquiries@wcva.org.uk

WCVA represents and campaigns for voluntary organisations, volunteers and communities in Wales. It provides extensive advice and information for those running community buildings, including village halls on topics such as funding, volunteering, campaigning and governance.

National Association for Voluntary and Community Action - NAVCA

http://www.navca.org.uk/

Address: The Tower

Furnival Square

Sheffield, S1 4QL

Tel: 0114 278 6636
Email: navca@navca.org.uk

NAVCA is the national umbrella body for local charities and community groups in England. It provides members with networking opportunities, specialist advice, support, policy information and training. It also advocates the needs of members with policy makers.

The Welsh Association of County Voluntary Councils  -WACVC

http://www.gwirvol.org.uk/

c/o Voluntary Action Merthyr Tydfil,
89-90 Pontmorlais,
High Street
Merthyr Tydfil
Merthyr Tydfil CF47 8UH

Tel: 01685 353912

Email: ian.davy@vamt.net

WACVC represent the County Voluntary Councils (CVCs) of Wales which are established in each county. It supports, develops and represents third sector organisations as well as promote volunteering.  

Community Matters

http://www.communitymatters.org.uk/

Community Matters
12-20 Baron Street
London
N1 9LL

Tel: 020 7837 7887

Community Matters is the National Federation for Community Organisations. It supports local community groups and volunteers through advice and consultancy and promotes partnership working between local groups. 

 

C2 Organisations and agencies that may be able to provide funding

 

Organisation / Authority

Funding Information

ACRE

ACRE runs the Rural Community Buildings Loans Fund. Up to £20,000 can be borrowed to build a new or modify an existing building. However, it must be used for a freehold or leasehold property with at least 21 months left on the agreement or evidence of security of tenure. Also local funds must contribute to at least 10% of the overall project costs. The loan can be paid back over 5 or 8 years and repaid early than agreed if funds are available. Village Hall Advisers can help with giving advice about eligibility and applications.

Local Authorities

It is possible to gain funding from local authorities for village halls; however, the likelihood of this varies across authorities. Types of funding include a direct contribution to capital expenditure, a contribution towards running costs, ensuring the hall receives 100% rate relief. Local authorities do not receive specific grants from the government therefore funding is given at their discretion. Village hall advisers can give guidance on local authority funding.

Local authorities in England and Wales include County, Unitary, District, Borough and Parish Councils (in Wales a Community Council is the equivalent of a Parish Council).

Rural Community Councils

Most local authorities in rural areas use the rural community councils as agents in assessing grant applications and determining aid. However, the allocation of grants rests ultimately with the individual local authority and priorities may differ from authority to authority.

The RCCs will usually have a Village Hall advisor who will have knowledge of halls in their area. They can also assist with sourcing funding and give advice.

The RCC is usually the first organisation we contact where a village hall has a funding or development problem. They may already have prior knowledge of the situation and discussing issues with them may avoid duplication of action. ACRE can provide relevant contact names and addresses.

Natural England

Natural England (previously The Countryside Agency) runs a wide range of funding schemes in line with their objectives. It may be possible to apply to them for funding. Schemes are added and withdrawn regularly. They also have information on other sources of funding.

The National Lottery

The National Lottery is a major source of money providing grants for both charitable and non-charitable organisations. Grants are administered through different bodies each with its own policy, rules and application process. Those bodies are:

The Big Lottery Fund - http://www.biglotteryfund.org.uk 

Arts Council England  -   http://www.artscouncil.org.uk/

·     Arts Council of Wales  -  http://www.artswales.org.uk/

·     Awards for All -  http://www.awardsforall.org.uk/        

·     Sport England   - http://www.sportengland.org.uk/ 

·     Sports Wales   -  http://www.sportwales.org.uk/

·     The Heritage Lottery Fund   -  http://www.hlf.org.uk/

       UK Sport   -  http://www.uksport.gov.uk/

Legal/Policy/Accountancy Framework

E1 The Charitable nature of village halls and their trusts

The provision of village halls is a charitable purpose for the benefit of the public under section 3(1)(m)(i) of the Charities Act – any other purpose within subsection (a) to (l) but are recognised as charitable by section 5. The provision of a village hall is deemed specifically to be charitable because of section 5 of the Act (previously contained in the Recreational Charities Act 1958). Accordingly, the objects of most village halls are set out to reflect the wording of the 1958 Act - to provide facilities for recreation or other leisure time occupation, if the facilities are provided in the interests of social welfare, with the object of improving the conditions of life for the intended beneficiaries.  A village hall is intended for use by all sections of the community in which it sits, although some users may come from outside of that area.

Village halls are similar in nature to community centres but they are not exactly the same from a charitable perspective. Community centres have model objects that allow for charitable purposes that are wider than those set out in section 5 of the Act. Also, the administrative provisions of a community centre typically encompass the groups or sections using it with the accounts from individual sections being included in the main account for the charity. In comparison village halls are used by groups who remain autonomous from the village hall charity. 

A village hall can be used in a number of different ways. The groups using the hall do not themselves need to be charities. Many halls have local sports clubs and hobby societies attached to them, as well as charitable groups such as scout or guide groups.

The majority of village halls are settled upon trusts contained in:

  • a model trust document produced by Action for Communities in Rural England (ACRE); or
  • a Scheme made by the Commission which replaces the original governing document. 

The models available from ACRE are:

  • model A - suitable for freehold property; and
  • model B - suitable for leasehold property.

The Commission has a model Scheme which is intended for existing halls where they are unable to work under outdated governing documents. However, care needs to be taken where a charity indicates an intention to adopt a model in place of an existing governing document. Some governing documents may already have a power of amendment allowing for changes to administrative provisions. The adoption of a new model document may be legally ineffective or have the effect of creating a second charity connected to the village hall. In either case confusion could be created about the basis of management for the village hall and need for a separate registration and accounting arrangements. This is a position that we bring to a charity's attention and consider how it could be regularised. Section B2 considers how we approach the question of 2 separate governing documents. 

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E2 The legal position in relation to imperfect trusts and the Charitable Trusts Validation Act 1954

The model deed upon which many older village hall charities were based contained references to the provision of a village hall for "social, moral or intellectual development" or "entertainment". Where a trust deed contains such wording it casts doubt on whether the objects are exclusively charitable and as such the trusts may represent an "imperfect trust provision" that would fall within the provisions of the Charitable Trusts Validation Act 1954.

The Act applies to trust provisions created before 16 December 1952 and defines imperfect trust provisions in section 1(1) of the Act, as;

"any provision declaring the objects for which property is to be held or applied and so describing those objects that,consistently with the terms of the provision, the property could be used exclusively for charitable purposes, but could nevertheless be used for purposes which are not charitable"

In practice this means the Act is applied where trust property has been used exclusively for charitable purposes, but where the objects declared in the charity's governing document allow use for non-charitable purposes. Where we apply the Act it has the effect of removing the non-charitable provisions of the governing document which otherwise would make the trust void.

The Act is not applied if the trust is for a valid non-charitable trust (for example, if the trusts as a whole indicate that the property is held for the benefit of members of a non-charitable drinking club). Also, it is not applied if the actual use of the premises is non-charitable (from which we usually infer that use for exclusively charitable purposes is not consistent with the terms of the provision).    lawyer_refer

The question of whether an imperfect trust exists depends on the precise wording used. Therefore legal advice should be sought. Legal officers may wish to refer to Ulrich and Others v Treasury Solicitors and Others [2005] EWHC 67.  This case considers that an express reference in the trust provision to a charitable purpose is not necessarily required.

The question of imperfect trusts is usually raised where we are about to register a village hall that has been operating for some time, with an old trust deed, but failed to become registered. Occasionally we find village halls that have been registered still contain the type of provisions mentioned here. It is important, therefore, that when dealing with village halls that we examine the trusts. Section B1.2 sets out how we apply the Act and when we consider making a Scheme.

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E3 Amending administrative provisions

Occasionally, some of our older Schemes provide that:

  • the appointment of co-opted trustees (sometimes called non-official trustees) shall only be provisional until such time as they have been given our approval.

Additionally, model deeds for village halls made prior to 1968 set out that:

  • a resolution of the committee of management allowing an additional organisation to appoint a representative member could not be effective until it had been approved in writing by the Minister of Education (whose function had been passed to us in the early 1970s).

It is possible for these provisions to have an adverse effect on the make up of the management committee. This happens usually where there has been a failure to get co-opted trustees approved or where representative appointments have been made without proper authority for the organisation to be represented. In reality this might mean that individuals are acting without proper authority or that the committee does not have a proper balance between appointed and elected members, which, in turn could have a detrimental effect on grant applications. Grant givers are keen to see that the people from the area of benefit who use the hall have a proper say in its running.

Our policy is that we will not approve these appointments or resolutions that appear in deeds or Schemes. These anomalies may be removed by using the provisions of section 280 of the Charities Act (see OG519 Unincorporated Charities).  

Section 280 may also be used to remove defunct organisations from the schedule of organisations who are allowed to appoint members to the management committee.

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E4 The nature of the land and buildings used by village hall charities

The land and buildings used by a village hall charity will be functional property. That is land used by the charity to carry out its purposes generally; this is distinct from land owned by a charity solely to produce income to further the objects of a charity.

In addition to being functional property it will usually be designated land (previously known as "specie land"). Designated land is where land is given on specific trusts to be used for the particular purposes of the charity, in this case a village hall. The impact of this is that a disposal of designated land would be a breach of trust unless :

  • the governing document of the charity gives power to dispose of it; or
  • the proceeds of any sale are used to replace the designated land for use for the same purpose.

If a disposal would involve a breach of trust we may need to make a Scheme to alter the trusts in order to permit the disposal and make arrangements to apply the proceeds of any sale.

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Please note that we will not make a Scheme in these circumstances unless there has been a public consultation.

 

The decision of the Court of Appeal - Oldham Metropolitan Borough Council v Attorney General (1993) 2 All ER p.432, confirms the authority for the sale of land and the replacement with other land without the need for a scheme. 

The ACRE Model documents and our own model Schemes for village halls all create designated land with a framework for disposal and use of proceeds.

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Permanent endowment is the property of a charity (including land, buildings, cash or investments) which the trustees are not able to spend as if it were income. Section 353(3) of the Charities Act says that a charity has permanent endowment unless all its property can be spent on its charitable purposes without having to distinguish between capital and income. The issue is not one of practicality, in that the capital can't be spent because it is in the form of land, but whether the governing document states clearly or implies that capital must not be spent as income. With village halls it is important to look at the sale clause (if any) to assess whether or not the village hall is permanent endowment. 

A village hall held on model trusts is not permanent endowment where there is no longer a need for a village hall because the model contains a power of sale and allows the proceeds of sale to be used for charitable purposes for the benefit of the local community without distinction between capital and income.  If there is no power of sale (in some cases indicated by the lack of provision to discontinue the hall) or if the proceeds of sale can be applied only to provide a replacement village hall, then the premises are permanent endowment. OG545 provides further guidance on identifying permanent endowment.

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Where there is any doubt about whether a village hall represents permanent endowment legal advice should be requested.

 

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E5 Village halls and recreation grounds

Occasionally we are approached to amalgamate a recreation ground with a village hall charity. This might occur where:

  • the two charities have adjacent land;
  • a village hall has been developed (without formal permission) on a recreation ground; or
  • trustees of a recreation ground think that it would be a good community amenity to build a village hall on their charity's land.

Our policy is that provided the amalgamation will not be to the detriment of either charity's interest we should take allow a Scheme to be made. The scope of section 62(1)(c) of the Charities Act allows for an amalgamation where the charities involved can show a more effective use of charity resource, having regard for the original gifts and applying them to common purposes. Section B3.1 sets out the considerations caseworkers need to apply where a scheme is considered.

E6 Use of church halls for village hall purposes (Albemarle Schemes)

In some areas, where no village hall exists, there may be an existing church hall which is used on an infrequent or irregular basis. Local people may see an opportunity to use it as a village hall. However, the explicit nature of ecclesiastical trusts and their difference from village hall trusts means that  it is not possible simply to operate the church hall as a village hall without our intervention.

We are able to authorise the use of a church hall for use as a village hall under what is known as an "Albemarle Scheme". This type of Scheme authorises a lease of the property to a village hall charity but with user rights reserved for the church hall charity. The village hall charity will usually be responsible for the repair and maintenance of the property under the lease and the rent payable will reduced to reflect this. The village hall charity, once established, will operate as a typical village hall.

Casework considerations are set out in section B3.2.  

lawyer_referAdditionally, there may be circumstances where the church itself wants to make its hall facilities available (within its own wider mission) for recreational type activities. This may not necessarily lead to an Albemarle Scheme and legal advice should be sought to discuss whether other arrangements should be considered.

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E7 Issues connected to sales and disposals of village halls and their land and the use of permanently endowed capital funds

E7.1 Disposing of a village hall with a power of sale

Most village halls have a power of sale in their governing document, although care needs to be taken to refer to the correct document in cases where there is more than one document (see section B2.1). The trustees can rely on the power of sale to authorise their actions. However, trustees must ensure that any additional conditions about a sale of charity property, and specified in the governing document, are carried out. Most model deeds and Schemes allow for sale of the village hall only where the decision to sell has been confirmed by a proportion of local inhabitants attending a meeting and voting on the proposal.  

The requirement for public approval can occasionally lead to difficulties where the trustees are unable to get the public support for the decision to sell, creating a stalemate situation. However, it is not our policy to amend this requirement as it would deprive the residents, as beneficiaries, of the right they hold to influence the management of the hall.

In addition to the conditions in the governing documents, the trustees must comply also with section 121(1)(2) & (3) of the Charities Act. This section provides that, subject to sections 121(5) and 121(6) & (7) of the Act, designated land should not be sold leased or otherwise disposed of unless the charity trustees have:

  • given public notice of the proposed disposition, and asked for representations within a time specified in the notice, being not less than one month for the date of notice; and
  • taken into consideration any representations made within the prescribed time scale.

Section 121(5) allows the charity to forgo the need for public notice and consideration of representations under section 121(1)(2) & (3) where:

  • the proceeds of sale will be used to purchase a replacement property which is to be held on the same trusts; or
  • the disposition is a lease for a term of less than two years (other than one granted wholly or partly in consideration of a fine).

Section 121(6) & (7) allows the trustees to apply to us for a direction that section 121(1)(2) & (3) need not apply. In such cases our decision will be based on whether this disposal is in the best interests of the charity.

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E7.2 Disposing of a village hall where there is not power of sale

If the trusts contained in the governing document do not contain a power to sell the village hall, but a situation has arisen where it is needed, the trustees may rely on the on the powers contained in the Trusts of Land and Appointment of Trustees Act 1996 (TLAT), so far as it does not frustrate the trusts. This means that where the hall is to be sold and a replacement property settled on the same trusts, the Act will give the trustees all the powers of an absolute owner, which includes a power of sale.

Where the intention is that the village hall is to be sold without being replaced, then TLAT will not apply and the trustees must apply to us for a Scheme which will give the power of sale and determine what should happen to the proceeds of that sale. Also, it is unlikely that the trustees would be able to use the powers of an absolute owner contained in the Trustee Act 2000. Those powers apply only to land acquired under section 8(1) of that Act and are subject to restrictions or exclusions imposed within the governing document (see OG86 B2).

Whether or not we authorise a disposal the trustees will need to comply with the provisions of section 121(1)(2) & (3) of the Charities Act, as outlined in E7.1 above.

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E7.3 Partial disposal of the village hall or village hall site

Where the charity wants to sell a small part of its land and not replace it the trustees will be able to rely on the TLAT provisions, without need for an Order or Scheme, providing that the disposal is so small it would have no impact on the charity's ability to carry out its objects. However, if the sale is something expressly prohibited by the trusts we would have to make a Scheme altering the purposes, allowing the sale to go ahead and setting out how the proceeds of sale must be used. 

In some cases a village hall may wish to sell or lease part of its property which may have some level of impact on the charity. In addition to ensuring they have the power to make the arrangement the trustees will need to ensure that:

  • the land or property in question is not needed for charitable use; and
  • its sale or lease is more beneficial to the charity than its retention.

Where there is no power of sale or outlet for proceeds then we would need to make a scheme as in section E7.2 above.

The trustees need to be aware that where part of the village hall itself is to be leased to provide income for the charity, it must be at a full market rate and must not interfere with the running of the hall for charitable purposes. 

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E7.4 Spending permanently endowed funds on village hall improvements

Our policy, where we are approached by trustees to spend permanently endowed funds of improvements to the village hall, would be to consider a resolution under section 281 of the Charities Act as set out in OG545 Permanent Endowment. Even where a resolution under section 281 is not appropriate our approach will nevertheless be based on the same considerations. We will not expect the funds to be repaid where;

  • there is an actual need for the work to be done and it is not simply an optimistic or speculative venture;
  • the funds will be spent on work of long lasting benefit and is essential to the continued use of the property;
  • in future the trustees will be able to, or have a realistic expectation that they can, provide for the repair and maintenance from the income of the charity.

There may be cases where other forms of funding such as grants or loans may be available and their use preferable to spending permanent endowment. However, it may not be feasible in all cases and should not be a bar to our agreement for a resolution.

E7.5 Moving site and the replacement of permanently endowed funds

Where the village hall charity wishes to sell all of its land to acquire other land to continue the purposes of the charity, the trustees will need to ensure that:

  • the replacement site is no less suitable than the existing site for carrying out the purpose of the charity; and
  • the replacement premises is freehold or long leasehold.

The trusts of the charity may permit the proceeds of sale of the original premises to be used in or towards providing replacement premises. If not, trustees can rely on the power contained in the Trusts of Land and Appointment of Trustees Act 1996 to replace like with like.

Where the sale funds represent permanent endowment and these conditions are not met we would consider replacement of those funds. For instance, we would question the long term viability of the charity for future beneficiaries where the charity moved to premises with a short lease and used all the permanently endowed funds in doing so. We would require replacement of the permanent endowment in order for the charity to rebuild the capital fund over a period of time and secure the charity for beneficiaries into the future.    

E7.6 Mortgaging of the village hall and deeds of dedication

Village halls often take the opportunity to secure grants and loans to improve their buildings. In most cases the charity trustees have the power to enter into proposed agreements which secure a charge over the charity's property providing they comply with section 124 of the Charities Act  - see OG 22. This includes where the organisation providing a grant looks for a deed of dedication from the charity trustees of the village hall, rather than a formal charge, to secure the repayment of a grant if a charity fails to comply with the conditions on which a grant was given (usually in the form of a restriction on the use or alteration of the property improved during the expected lifespan of the grant aided improvements). 

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Questions and Answers

F1 What information do we have for trustees?

We have an information sheet for village hall trustees on our web site, it contains links to other relevant information.

F2 What makes village halls charitable?

See section E1 about the charitable nature of village halls and their trusts.

F3 Who are the trustees of a village hall?   

Section B1 sets out the different types of trustees that comprise the management committee.

F4 What action do we take when a village hall needs to alter its governing document?

Section E3 considers the use of section 280 of the Charities Act to alter administrative provisions of governing documents and section E2 looks at the Charitable Trusts Validation Act where there are defective trusts.

F5 Can a village hall be sold?

Section E7 looks at different forms of disposal and what must happen to the proceeds from any disposal

F6 Can anyone else, other than us, help village hall trustees?

We have a list of different organisations and agencies who may be able to help village halls. This can be found under Charts