SANHS Due Diligence on South West Hertitage Trust (SWHT)

The SANHS Board of Trustees had hoped to approve the package of legal documents and support for the SWHT at its special meeting on 26 June [minutes on http://www.sanhs.org/Notes.htm]. Since 26 June SANHS has received several updated drafts of the three formal documents between the SCC and the SWHT (grant, transfer, and collections management) which cover the operation of the SWHT. Drafts of the two key legal documents for SANHS, that is the sub-lease transferring property from SCC to SWHT as a sub-tenant of the Castle Estate, and the licence for the Archive, Library and Museum Collections (relating to the current Agreements with the SCC) have also been received. The Archive Collection Agreement is a new Agreement.


The Development and Policy Committee (D&PC) of the Society, empowered by the Trustees to evaluate these documents, has established a legal sub-group to consider them. This sub-group has convened many meetings since 26 June under the chairmanship of the Honorary Secretary commenting on the draft documents, and there has been an internal meeting with our legal advisor from Foot Anstey, who advises on property matters. This has resulted in an agreed outline of the property sublease.

Vesting of the SWHT is still anticipated for 1 October 2014, and the sub-lease of the Castle to the SWHT must be is in place by then. SANHS Trustees have to consider whether they need non-property legal advice as well. A commentary of D&PC views on the formal agreements between SCC and SWHT has been sent to the Council, including whether there were any SANHS fundament points which had not been met.

The SCC believes there will be no difference from existing arrangements under our collections agreements after the SWHT takes responsibility for the operation of the Collections. However, the legal sub-group has concerns that the Collections must be discrete and protected against financial difficulties of the new Trust, for instance in case of failure of the SWHT. To ensure SANHS interests are fully protected the D&PC is in the process of taking independent legal advice on this issue.

24 August 2014

June 2014 Update

SANHS Update June 2014.

At the December 2013 General Meeting, the Society and Somerset County Council presented their respective positions in relation to the Council’s intent to devolve the delivery of its heritage services to a charitable company, limited by guarantee, by 1 September 2014 and thence to a charity. The minutes of the General Meeting can be found at http://www.sanhs.org/Notes.htm or as a paper copy in the SANHS Office. The Society has been linked to the County Council since before 1957 and, as a result, has benefited from nearly £20M of investment in the County’s heritage and we need to protect these advantages in the face of change to the service delivery that the Council is currently implementing, which we believe is the best, viable option.

The Trustees of SANHS, from their risk management perspective, must have confidence that the conditions within the Castle lease with the Council will be met by the Trust and confidence that the procedures and conditions of the several collections loan agreements with the Council will be met by the new Trust. Our Trustees must also be confident that the new Trust will protect the heritage of Somerset for future generations. There are questions about what the current measures of levels of services are, and clear metrics are needed. Trustees also have concerns about arrangements if the legal agreements are compromised or the levels of service are not achieved.

At their meeting in February 2014, the Society’s Trustees signed a Non-disclosure Agreement with the Council through which detailed, financial information, requested in November 2013, was provided.  The financial information necessary for the confidence of our Trustees is being analysed by the Development and Policy Committee so that it can draft a ‘due diligence’ paper for the Trustees. The ‘Heads of Terms’ was agreed and signed for the Trustees just before the 2014 AGM. We also set a high priority to completing a new legal agreement with the Council for the loan of our archive collection, and that agreement has also been signed so that it is now possible to devolve its management to the new Trust.

After the December 2013 General Meeting when the Chairman of the Estates Working Group presented the Trustees’ position concerning the future of Wyndham Hall, a final request was mailed to all Members for a leader, a capable team, and a long-term plan for the development of the Hall under the Society’s direct management. The presentation slides used at the General Meeting can be found on the website at http://www.sanhs.org/Wyndham%20Hall.htm.  The position at the beginning of May is that a leader and a team are assembling a plan for submission to the Estates Working Group by 17 May 2014. Based on the recommendations of the Group and the affordability, viability and sustainability of the plan, the Trustees will decide on the exclusion or not of Wyndham Hall from the Taunton Castle sub-lease to the Trust at a Board meeting on 26 June 2014. At this meeting the Board will also consider its ‘due diligence’ paper and the final set of legal agreements for the devolution of the management of our assets to the new Trust.

It is the job of Trustees to manage and protect the assets and public benefits of the Society in the best interests of its charitable purposes as required by its constitution. The complete story of the Society’s response to the implications of the Council’s plan to create the South West Heritage Trust as the agent to deliver its heritage services can be found at http://www.sanhs.org/SHS Review.htm.

UPDATE ON PROGRESS WITH SOMERSET COUNTY COUNCIL’S REVIEW OF ITS HERITAGE SERVICE DELIVERY

 

Members will remember that the last update report, published in the autumn Newsletter, gave an account of the work that the Development and Policy Committee of the Society has been examining with a view to protecting the Society’s interests in relation to the proposed formation of a Somerset Heritage Trust.  The decision of the Cabinet of the Council on the affordability, viability and sustainability of the Trust has been delayed from its planned date of 23 October to 11 November, and the so-called ‘Gateway Paper’ to inform that decision is expected to be published by 28 October.  These delays resulted in the postponement of the SANHS General Meeting planned for 5 October.

The Society is assessing the extent to which the new Trust seeks to exploit and develop our assets, devolved to its care, in relation to the charitable purposes of the Society and developing detailed provisions of procedures to be followed in the event of failure of the Trust.  The Society has instructed lawyers to scope the requirements for new agreements with the Council, the full costs of their work being born by the Council, and a first meeting of these lawyers with the Council’s legal team was held in late July.  We have since consulted the Charity Commission, Arts Council England and the National Archives for advice on their views of the proposed devolved governance of Somerset’s heritage services.  The Society is as fully involved as is practicable and possible in the general process of resolution and clarification essential to the Trust proposal and not just sidelined to tinkering with a few leases or agreements as though they were separable from or incidental to the whole change process.

The Society had repeatedly requested details of the financial model for the Trust and its likely purpose, governance, and structure so that effective due diligence of the new management arrangements might be put in place.  The meeting of legal representatives was the catalyst for the provision of the latter, which held no significant surprises for the Society when analysed by the Development and Policy Committee.  The governance detail resembles that on which the management of the Society is founded.  Detail of the financial model remains confidential to the ‘Gateway Paper.’  We now know nearly as much about the proposed Trust as we do about that of the existing Heritage Services organisation of the Council with the notable exception of substantive detail of the affordability, viability and sustainability of its funding.

The Council has reportedly discussed its proposals with the National Archives and English Heritage and received an approach from Devon County Council on the possible inclusion of its heritage services in the Trust.  Devon Council officers have yet to seek approval of their Cabinet and complete a period of consultation.  Any statutory responsibilities that the Trust discharges will be on behalf of the councils, who retain the statutory duty.

We have been told that Somerset County Council has assembled a Trust budget for the first 5 year cycle in four categories:

• Staffing: This has used indicative figures for the level of staffing that would be needed to run this type of trust, benchmarked against 2012-13 staffing levels.
• Non-staffing: This has been based on current levels and future- proofed for inflation.
• Additional costs of operating as a trust: Council will contribute to support these additional costs.  The assumption is that budgets will move to the trust and that relevant services (eg IT, payroll) will either be bought back from the Council or sought elsewhere.
• Income: Projections have been modelled in a variety of ways, and do not pre-suppose charging for entry to museums.

Council officers assure us that their main intent is to maintain current service levels for the next 5 years, to fulfil key contracts such as with Heritage Lottery Fund, and to establish a Trust that can be expected to sustain leases and agreements for 30 years.  They plan to establish a shadow Board of Trustees to work in parallel with officers whilst developing the strategic and operational management of the Trust until a not-for-profit company limited-by-guarantee and charity is vested.

The ‘Gateway Report’, when published on the Council website at the end of October, will reportedly include a section setting out the financial case, a section explaining the major proposals and how risks will be mitigated, under the broad themes of governance, scope, the mechanism for how the trust will be set up, operations, property assets, collection assets, HR and levels of support, and a summary of the main benefits.  Invited to propose a paragraph for the Cabinet Summary to the report, the Development and Policy Committee agreed the following ‘Taunton Castle (excluding Castle House) will be sub-let by the County Council (as tenant) to the trust (as sub-tenant) subject to the consent of Somerset Archaeological and Natural History Society (as landlord). The Society has confirmed its intention to work positively with the County Council and is supportive of the trust concept. The precise terms of any sub-lease will be agreed during the implementation phase’.

The Development and Policy Committee will continue to explore the Society’s relationship with a possible Trust and analyse substantive financial information when it is published in the ‘Gateway Report’.  After the last Board meeting the Committee generated a set of fundamental points to guide discussions and negotiations with the Council.  Following Arts Council England advice, it also plans to carry out a strengths, weaknesses, opportunities, and  threats (SWOT) analysis to determine what are our alternative options and prepare a paper on our 'Expectations of the new Trust' which can be given to the Council.   

You should be assured that the Society is managing the significant opportunities and threats posed by this Somerset County Council initiative as effectively and professionally as is practicable and possible. Our Trustees will be involved with discussion and negotiation of all sub-leases and agreements involving its assets and, with their lawyers, will have oversight of them.  On the basis of prior experience, this is likely to be a complex and protracted process in the ambitious timetable proposed by the Council to carry the project successfully through the Cabinet gateway approval into autumn 2014.  The Board of Trustees, meeting on 24 October, will determine when and where the re-timed General Meeting will be held.

Further details and papers can be found on the SANHS website as follows:

http://www.sanhs.org/SHS%20Review.htm

SCC Cabinet Full Business Case 20 Mar 13

Somerset Archaeological and Natural History Society’s Comments

for Somerset County Council Cabinet Committee

On 20th March 2013

Somerset Archaeological and Natural History Society (SANHS) is grateful for this opportunity to comment on the Heritage Service Review – Full Business Case. The Heritage Service has been and remains a key ‘partner’ in the care and maintenance of the Society’s Castle Estate and of the three priceless collections on loan to the Council. The financial and operational viability of any successor organisation is therefore of prime concern to us.

We welcome in principle the decision to retain a consolidated heritage service, but feel this may create many conflicts of interest within the trust. We are pleased that SANHS has been recognised as the major partner for the proposed Trust. However we are concerned that, although we have been advised of the timescales for the review process, we have not been consulted on any detail and we can foresee as many as 70 – 80 issues for SANHS within the proposals.

Of most concern to us is the continuing well-being of our Collections and castle estates for which we, as Trustees, are responsible in law to the Charity Commissioners. We recognise that within the document it is proposed that our Museum Collection, which accounts for well over 25% of the items managed by the Heritage Service, should be ring-fenced to remove it from risk should the proposed Trust fail. We would expect the same arrangements to be made for the Society's Castle Estate, our Archive and Library Collections.

Professional and legal advice will be essential to protect the Society’s interests during what we believe, even with co-operation by all parties; will be an expensive and protracted process. We are grateful therefore for the recognition in Appendix A and in earlier correspondence between the Society and the Council that our costs will be met, although the £5,000 suggested for "Third Party Cost" is not viable. To speed the negotiations, however, we feel this agreement will need to provide for the Council taking responsibility for settling the Society’s costs directly, so avoiding any impact on our very limited cash flow.

The Society expects a full and detailed consultation with those responsible for taking this plan forward to the Gateway Report and will seek advice from the Charity Commissioners and from Arts Council England as required. We hope negotiations with the Council will lead to an agreement which protects and enhances the value of heritage within the historic county of Somerset.

SCC Scrutiny Outline Business Case

The Cabinet - 4 July 2012

Speakers at Public Question Time

Mr Chris Sidaway - Deputy Chairman of Somerset Archaeological and Natural History Society (SANHS)

As the papers demonstrate, Somerset Archaeological and Natural History Society is Somerset County Council's most significant partner in the field of heritage through owning the Castle and 40% of the collections. SANHS would like to publicly thank elected members for the vision and foresight to develop the Somerset Heritage Centre and Museum of Somerset which have become national exemplars. We feel strongly that the existing Heritage Service not only provides enjoyment, education, social cohesion and well-being to the residents of Somerset but is a proven economic driver supporting the tourism offer and economic development.

 We support the "Vision" outlined and agree that the totality of the service and the collections as its major strength and within our Society have expertise across all the disciplines and would expect opportunities to contribute to "fleshing" out the Vision and participating in its delivery.

 Currently the low rent charged on the Castle recognises the full maintenance agreement within the lease with Somerset County Council and this would need to continue to satisfy terms of the lease, conditions of the HLF settlement and allow us to carry out our charitable objectives and safeguard our assets.

 We would emphatically register with members that any changes to existing arrangements would be service led and that any legal costs are met in full by Somerset County Council as recognised in the report.

 SANHS do not want to see any reduction in service but expect the review to identify means in which the same level of service be achieved in a more effective and efficient way and investigate maximising income and external funding opportunities whilst exploring more creative ways of working with other local authorities and voluntary sector partners such as ourselves to consolidate 60 years of a symbiotic relationship.
I would like to conclude with a quotation from Rev. D.P. Alford our onetime Hon. Secretary and author of a short history of Taunton Castle in which he concludes:

"Surely it must be allowed that so ancient as fortress as Taunton Castle, with such an interesting outlook on the past and turned to such good use in the present, claims sympathy and support from every local patriot of Somerset"

He was writing in 1923 but does that sentiment not have resonance today.