Royal British Legion (Princes Risborough)

Lord Stunell Excerpts

Thursday 15th September 2011 Commons Chamber

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

I am pleased to be responding to this debate. I congratulate my hon. Friend the Member for Wycombe (Steve Baker) not only on securing this debate, but on speaking on behalf of you, Mr Speaker, and making it very clear what the issues are. When I was first told that I would be responding to this debate, I had a moment of self-doubt, but the Secretary of State assured me that I am exactly the right person to respond. I hope that any deficiencies will be forgiven on this occasion.

There is clear and passionate concern in the community of Princes Risborough over this issue. I have read the correspondence and heard what my hon. Friend has said. There is a strong belief that a better outcome was possible within the constraints of charity law. I hope that I can address that particular point. My hon. Friend, I think, invited me to give a Government view on a legal interpretation. I am sure he will understand that it is not possible for me to do that. Perhaps in the course of my remarks I can give him some pointers that he can take forward. Princes Risborough is evidently a very fortunate town, given that so many Members of this House are so strongly engaged in securing it a better future. I and the Government are sympathetic to the concerns that have been raised. I applaud the efforts of the local community and the town council to save the hall on behalf of the local branch.

My hon. Friend has set out the rollercoaster of events that have taken place and brought us to this situation. All too often, when hon. Members bring issues before the House by way of Adjournment debate, it is a case of spilt milk. On this occasion, as well, I have to say that it is not possible for the Government to come along and put the milk back into the bottle. Of course, the underlying problem is that, as a charity, the Royal British Legion is required by charity law to act in the best interests of the charity and obtain the best price it can when disposing of land, and it would be inappropriate for the Government to intervene and cut across that process. I note, however, that it would have been lawful for the Royal British Legion to transfer the property to the local branch provided that the local branch was set up as a charity and had the same objectives, broadly speaking, as the legion.

That brings us to one of the crucial points that has been in dispute between the legion and those who support the efforts of Princes Risborough’s residents. Where land or property is held in trust for charitable purposes, special rules apply under charity law once charity trustees decide to sell. In general, the charity must obtain professional advice and seek the best price it can get. That approach is designed to maximise the funds that can then be reapplied to the charity’s purposes in other ways. Charity trustees cannot sell land or property at less than best price unless to another charity with compatible charitable purposes or where the land is to be leased to a beneficiary of the charity.

A charity’s trustees are ultimately responsible for running the charity. Their freedom and independence to act in the best interests of the charity and its beneficiaries within the law and the terms of the charity’s governing document is a fundamental principle of charity law. It is the trustees’ decision whether to dispose of land at below best price to another charity with compatible charitable purposes or whether to sell it on the open market for the best possible price and use the funds generated to further the charity’s purposes in other ways. I suggest that the crucial point is the option that the Royal British Legion had to take the former course rather than the latter.

A review of the Charities Act 2006 is due to begin shortly. That Act requires the Government to carry out a review of its working every five years and to report to Parliament, and the review will consider the rules around the disposal of charity land. It is expected to take between six and nine months and it will report to Parliament. In all probability, there will be an announcement about that next month.

It is worth asking what the rules are and which issues my hon. Friend might want to consider raising during that review. Existing charity law dictates that trustees must always act in the best interests of their charity. How they demonstrate that is usually left to their discretion, but when it comes to selling, leasing or transferring their charity’s land, the law sets out clear requirements to ensure that those important transactions are properly managed in the charity’s interests and that the trustees obtain the best price that is reasonable in the circumstances.

In most cases, the law enables trustees to proceed without approaching the Charity Commission for specific approval before they carry out the transaction. Trustees must think carefully before disposing of valuable assets of the charity. They might be useful in the future and therefore the trustees must be satisfied that any disposal would be in the best long-term interests of the charity. They should consider whether it would be better to retain the land for longer and perhaps continue to take any income from it so as to earn more from it later; to consider continuing to use it for the benefit of the charity in spite of the money that could be realised; or, as I just said, to decide to transfer it to another, parallel charity.

In most cases, charities can undertake a disposal of land without the need for prior authority from the Charity Commission. In cases where the trustees have decided that it is in the charity’s best interests to dispose of the land, the trustees must ensure that they have obtained and considered a written report from a qualified surveyor, advertised the disposal following advice from the surveyor and satisfied themselves that the proposed terms are the best that can be reasonably obtained in the circumstances of the disposal. Those requirements were referred to in the correspondence from the representative of the Royal British Legion that my hon. Friend read into the record a few minutes ago.

This is not the first case in recent years where a charity has decided to sell a property against the wishes of the local community. In many cases—this is one—the local community might want to take over the assets at below best price for continuing charitable purposes. The important point is that that is not possible unless they are similar charitable purposes to those of the selling charity. Disposal at below best price is permitted only where the property will continue to be used for charitable purposes that fall within the disposing charity’s purposes. In some cases, even where the local community wants to use the property for the same charitable purposes—this might well be such an example—the trustees may decide that selling at below best price would still not be in the charity’s best interests and may proceed to sell the property on the open market. Ultimately, that is a decision for the trustees of the charity, having sought suitable professional advice.

As I said, the Charities Act requires the Minister for the Cabinet Office to appoint a person to review that Act within five years of its enactment. The review is expected to be broad in scope and will consider the charity law provisions regulating land transactions. The review is expected to take between six and nine months and must report to Parliament on its conclusion. It is unlikely that the review will recommend changes that would undermine the fundamental principles of obtaining best price for disposals to recycle funds to the specific charitable purposes, except where, as I have said, the charity has compatible purposes. It is also unlikely that there would be a change reducing the freedom and independence of charity trustees to make decisions, with professional advice where appropriate, that are in the charity’s best interests, within the law and the terms of the charity’s governing document.

I know that my hon. Friend and you, Mr Speaker, are articulate, persistent and ingenious, and I would be disappointed if hon. Friends and Members were not able to draw from this incident the strength and determination to make a submission to that review of charity law—perhaps one that uses this case as an object lesson and draws attention to how important it is that a charity, when reconfiguring its assets, has regard to the opportunities for other charities in the locality with a common purpose to continue to provide a charitable service using those assets.

Perhaps also a representation could draw attention to the provisions of the Localism Bill—by then it might be an Act—which my hon. Friend drew attention to and asked me to comment on. When the Localism Bill becomes an Act, it will introduce a community right to buy. I want to make it clear that it will not be an absolute right to buy, but there will be a window of opportunity for community organisations—the town council, for example—to make a bid for community assets. The Government are well aware that the most common problem that communities face when trying to save a building or amenity is a lack of time and not being given enough notice to do anything about the issue.

Over the past decade, communities have been losing local amenities and buildings of great importance to them, such as village shops, the local pub or community centres. The Localism Bill is introducing measures that will provide people and community organisations with a fair chance to bid to take over assets and facilities that are important to them. Any submission made in pursuance of the review of the Charities Act might want to draw particular attention to the community right to buy, and to consider whether it might be appropriate to draw lessons from this experience.

It is certainly the Government’s intention that it will be much easier for local communities to save important community assets, enabling them to tackle real social need and build up resources and employment in their neighbourhood in more innovative, enterprising and cost-effective ways. There is no doubt that, under the provisions in the Bill, the community and the town council in Princes Risborough would be able to nominate the British Legion hall as an asset of community value, and when the British Legion decides to put the hall up for sale, the town council and the community would have additional time to raise additional funds and develop a robust business case.

I realise that this issue has created a great deal of difficulty and tension in the community in Princes Risborough, but I want to pick up on one of my hon. Friend’s points about what might happen, should the premises be transferred to the Chilterns Christian Fellowship. Both he and I hope that the fellowship would play a full and active part in supporting the community of Princes Risborough and making the facilities available. I understand that it has indicated that it would be willing to support the activities of the local branch, possibly including hosting some of its activities. Speaking in personal capacity, I would welcome that, and I want to encourage constructive dialogue between all parties to ensure a satisfactory outcome.

As I said earlier, there is no way that I, on behalf of the Government, can put the milk back into the bottle, but I hope that I have done something to assure the House that there will be a better route in future, and that there are still positive outcomes to be had in Princes Risborough.

Question put and agreed to.