Cycling UK Forum

Regulator wrote:At present the Trust requires a substantial 'balancing payment' (as the formerly named 'subvention' is now known) in order to balance its books. This in addition to the payments made by the Club to the Trust for services provided by the Trust on behalf of the Club.

Last year the balancing payment was £453,000. This year it will be even more. We won't know until the accounts are published - and we understand that this may happen later than usual.

The Club makes a profit each year. The Trust doesn't - effectively without the balancing payment it would make a huge loss each year.

Combine the two and the results could be disastrous if the Trust isn't forced to reign in its spending and 'cut its cloth' accordingly, particularly now that its major sources of funding are beginning to dry up.

I think Regulator over simplifies. The Trust does much more that just run government contracts. As I have tried to explain previously:

"the cost of management and membership services supplied to the Club by the Trust was £1,290K. Basically this was for all of the activities that were carried out that would have been within the traditional remit of the CTC before formation of the Trust. All but 4 of the staff are employed by the Trust and the Offices are owned by the Trust, so you can see that very little happens under the auspices of the original CTC. The services provided by the Trust include administration, I.T., the website, campaigning, information, volunteer support, media relations, marketing and fund raising.

These cost are covered by a direct charge to the "Club" of £407K, which is the figure for services which are not covered by the current charitable objectives of the Trust. Any costs that can be deemed within the charitable objects of the Trust are left with it. The balance of £883K is met by the subvention (some refer to it as a donation) from the Club to the Trust of £453K together with the funds generated by the Trust of £430K".

The CTC may well have to review its expenditure, but it will be across all aspects of it operations.

meic wrote:So of the membership of 64,000 we have had 34 genuine errors.

This forum seems to have been very disproportionately affected.

Not sure that it is that disproportionately affected. According to the stats at be bottom of the opening page there are 13,965 members of the forum. This thread has had 77 posts and 1692 views. Allowing for people revisiting I speculate that possibly somewhere in the region of 500 to 1000 individual members will have viewed the thread.

I haven't gone through in detail but I don't think there have been more than a dozen real problems reported in the thread. If we take 12 as a proportion of 500 it is still quite small and very small against the nearly 14K members of the forum.

Regards,

John

Hi Jabbs,

jabbs wrote:This is my first pitch at the debate so I might be missing something. Does the CTC mean to put itself into the same bracket as Age Concern or Oxfam? My take on Charities is that they exist for the benefit of disadvantaged groups such as the sick or needy, not fit outdoor types like us or the Ramblers Association.

Charities exist for those things but have always existed for more than that. Did you realise that most public schools such as Eton are charities? http://www.thirdsector.co.uk/news/Artic ... ce-courts/

The reason that the merger is being proposed is that the Charity Law changed so that all the activities of the CTC fall within the definition of charitable purposes under the 2006 Charities Act.

You can see the things that qualify as Charitable Purposes at http://www.charity-commission.gov.uk/Charity_requirements_guidance/Charity_essentials/Public_benefit/charitable_purposes.aspx. Probably the most important from the CTC's point of view is "the advancement of amateur sport".

This is defined as:

1. The advancement of amateur sport means the advancement of any sports or games which promote health by involving physical or mental skill or exertion and which are undertaken on an amateur basis. Our published guidance on Charitable Status and Sport is currently being revised to reflect the definition of sport in the Charities Act.

2. Examples of the sorts of charities and charitable purposes falling within this description include:

* charities advancing sport at a local club e.g. local football, rugby, tennis clubs etc;
* multisports centres;
* other organisations concerned with the promotion of a particular amateur sport or game.

jabbs wrote: I myself Have the good fortune to be a fit, active, cyclist, certainly not a deserving cause for charitably minded people. If they are going to donate money I would sooner see it go to the RNLI or Cancer Research

I'm glad to learn that you are faring so well.

The idea behind charitable status is to make the most of our resources and in particular save on tax where possible. It will also make administration easier with the elimination of quite a few areas of duplication, particularly re. accounts. The CTC will be able to make your subs stretch further and remember, while we certainly try and assist our members in being "active cyclists" we also help improve people's lives by giving them an interest and a form of activity which improves their health.

If we consider how many people may die due to the effect of obesity and a sedentary life style, I think I could make a case for saying that the CTC may be able to save more lives than the RNLI by encouraging people to be active cyclists such as yourself.

I'll attempt to deal with Simon L6's request and link it to Jonty's query as I think to some degree they relate. Simon Connell has already addressed most of these but I have a slightly different (& possibly erroneous ) perspective.

Simon L6 wrote:

John Catt wrote:There are other issues that certainly need to be addressed, but from my perspective, I think it would be much easier to deal with these as a merged charity.

you could explain why you think that.......

Jonty wrote:You accept that there are deficiencies in the way the CTC is currently run and you are sympathetic to the concerns which Simon and others have raised in this regard. You consider however that these deficiences would be better addressed and resolved under the new proposed structure rather than the existing one. Why do you say this?

Quite simply it would simplify the organisation, making it easier to monitor and reducing the administration overhead. Simon has already addressed the issue to some extent. One simple example is that we have to have two job descriptions for the Chief Executive, one re. the Club and one the Trust and such duplication, whilst minimised is inevitable across much of the organisation. Two sets of administration on every item of accounting and legal compliance. Audit, bank charges, duplicate accounts, duplicate payroll etc. Producing CTC group (club and trust) accounts in one format for companies house and another format for the charity commission has led to considerable confusion when members look at separate consolidated, club and trust accounts, as Simon has already pointed out.

One of our problems is that our current accounting system is "squeaking at the seams". We are looking at a replacement with the capability of providing the kind of Management Information that Simon L6 has referred to (cost of up to £100K for this have been mentioned). One reason it is "stressed" is due to having to maintain accounts for 2 companies rather than one. I'm not sure that we would want to invest in a system that would book staff time hourly as I believe Simon L6 has recommended. I think that would probably be overkill. I believe we can certainly get smarter in allocating all our staff time between projects, getting a better picture of how we are utilising our resources . What I don’t want to see is spend on providing pointless information, such as whether a press officer has just taken a phone call about promoting CTC membership, campaigning or one of our projects.

Jonty wrote:Based on my experience working in Central Government, Local Authorities and the private sector, I've found that restructuring can often be damaging and counter-productive. When there's a perceived problem, or a perceived need to respond to new "opportunities", senior managers often tend to think that structural change is the solution, whereas in my experience any structure can be made to work if there's a will to make it work and if you have right people and the right ethos.

In fact in my experience changing structures is often symptomatic of poor management and leadership. Rather than tackle the real issues, managers take the easy way out and change something which is relatively relatively easy to do and which shows that "they are doing something".
Surely it is much more sensible "to get your house in order" before considering changes to structure or governance? Surely adopting a new system of governance or structure without first addressing the existing "problems" will simply compound the problems and make them much more difficult to identify and resolve later?

We are at one on this point. I'm a strong believer in evolution rather than revolution. My experience has always been that re-organisation reduces productivity.

In fact becoming a single charitable organisation with the Trust merging into the club would mean no organisational change. As I tried to make clear in my analogy to the family and the loan, we are already operating as a single organisation but having to report as two. I also tried to make the point in my long post of 30/11 that we gain nothing from not being a charity if we hold to this structure, since IMHO a court would hold the club responsible for the management of the trust and therefore liable for any of its debts.

The structure as I understand it was never set up to protect the club from the liabilities of the trust. The existing structure was set up before the 2006 Charity Act became effective, to take advantage of the charity law as it then stood. If we were going through the same changes today I'm sure that the Council would be recommending that we become a single charity.

If we want the Club to be protected from any problems in the Trust we need to put "clear blue water" between the Club and the Trust. One of the members of SavetheCTC recommended that we follow the structure of the RYA which has a Sailability charity within its auspices. I investigated and found that they had had problems with a situation where Council members were the trustees. Now RYA Sailability has the RYA as its sole member but the Trustees are nominated by the existing trustees, approved of by the RYA council and are never drawn from the RYA council, in order to avoid any conflicts of interest. The CTC Trust has the CTC as its sole member and the Trustees are appointed from members of the Council.

I believe we would need to move to the trust having completely independent trustees, with separate management and personnel if we are to have reliable protection against any claims relating to the liabilities of the Trust. This would mean that the Trust would act independently of the Club and Council would have no say in its operation and would certainly be a major reorganisation.

IMHO we are already a charity for all practical purposes, without (perversely) taking advantage of full charitable status.

Jonty wrote:I accept that there are opportunities to increase income from Gift Aid if the CTC becomes a unified charity. The amount of money involved may not be much as many expect given the financial climate which will exist in this country for the next 10 years and it is likely to be relatively small, as Simon has pointed out, relative to total income. But surely it makes sense to address current issues which need to be resolved before bringing about non-reversable changes with a view to chasing a limited pot of money?

As I hope you will have gathered, I think the current arrangement is far from optimal. We are failing to take full advantage of charitable status, landing ourselves with unnecessary extra administration and providing an unnecessarily complex business model to both Council and members. Like Simon, I believe the organisational changes provide the largest benefit, and the additional income is "very nice to have".

Jonty wrote:My second point relates to process. The CTC has a corporate strategy which was prepared relatively recently and envisaged the present structure continuing at least up to 2010.

Can I ask, has this strategy or plan been subject to monitoring? Have annual monitoring and implementation reports been prepared on how the plan is progressing? If such annual assessments have been undertaken, have any identified the need to change the governance of the CTC? In other words has the proposal to merge been the result of a considered process linked to the approved plan and its implementation?

I'm suggesting that we retain the existing structure as a combined charitable organisation. This is, I believe, fully in line with the strategy which was set up before the current Charity Act (but adjusted for it).

As to annual assessment, I haven't been around for a year yet. I know we are planning to review the strategic plan and expect to be looking at the past, the present and where we think we might be going . The staff have produced annual and three year rolling business plans for each business area which Council have to agree and of course circumstances change.

Sorry to have gone on at such length again.

Hi John,

swansonj wrote: 4. Regain the spirit of the club. Provide better member service so that the club is attractive to a yet wider membership. More of an emphasis on local engagement. Stop performing commercial services just because they boost the club's size or status. Continue to lobby on cycling issues, with a sharper focus because any possible compromises produced by commercial pressures would be reduced. Transparent financial procedures. More openness of information. No treating of members or staff with contempt. Then the organisational structure can sort itself out because it won't matter so much. But sort out all of those issues before changing the structure, because merging in the present setup just seems to cement all the problems yet further in place.

I am trying to improve the "openness of information" of the CTC and many of the other issues you raise. One of the few things I have done as a Councillor is propose, and have accepted by Council in principle, that the non confidential minutes and papers of Council's and Sub-Committees should be published on the web and a paper on this will be going before Management Committee tomorrow (if we manage to make it in ).

I thought I was also attempting to be "open" as a new councillor of less than a years standing, setting out my thoughts on how I see the situation and the alternatives available to us.

I did say

I hope members will forgive the length of this post but I think it might be useful if I attempt to evaluate the alternatives before us as I see them. Supporters of SavetheCTC are of course welcome to comment/criticise/correct and come up with their own scenarios as they see fit.

There appears to be a great deal of looking back in this matter. No doubt mistakes have been made in the past. All individuals and organisations make mistakes. As I think Joseph Conrad said "It is only those who do nothing that make no mistakes". I am trying to evaluate where we are now and figure out the best way forward. The CTC strategy is up for review. Surely discussing such matters is appropriate?

Many of the problems highlighted have nothing to do with the issue as to whether it would be best to be a merged charity and what would be the best form of structure. There are other issues that certainly need to be addressed, but from my perspective, I think it would be much easier to deal with these as a merged charity.

Simon L6 wrote:.... Consider this...

third party insurance costs about £3.50 a member
the legal advice line can be had for free
the rides leaders insurance costs next to nothing
the mag costs just over £2 a member
campaigning costs about £3.50 a member
the administration of the membership service costs about £4.50 a member
RtR support and support for DAs is a tricky thing - skilled staff spend a lot of time shuffling paper, but I would say that the value of it is about £2 a member

So, correct me if I'm wrong, but a competitor could come in, do the membership thing efficiently, (spurning paper membership), do an electronic mag rather than a paper one, and provide a decent service for.......about twelve quid???

At last an alternative strategy from SavetheCTC .

I hope members will forgive the length of this post but I think it might be useful if I attempt to evaluate the alternatives before us as I see them. Supporters of SavetheCTC are of course welcome to comment/criticise/correct and come up with their own scenarios as they see fit.

As I see it there are essentially 3 alternatives open to us (rather too black and white but it would take forever to analyse all the shades of grey).

1. Stay as we are.
2. Combine as a single Charity.
3. Unbundle the Club.

Stay as we are

The problem with this is that the Council has the "Trusts" trustees on board and runs most of the CTC operations through the "Trust". I believe this means that effectively, as a Councillor, I am a "shadow trustee". This is an over simplification but I believe both the "Club" and its Council have a fiduciary duty to the "Trust" which it established and which, to all intents and purposes, it controls. Charity law makes it clear that anyone who controls a charity (be it individual member or a corporation) has a fiduciary duty to the charity.

To quote from http://www.charity-commission.gov.uk/publications/rs7.aspx?#37 However, the Charity Commission considers that the rights that exist in relation to the administration of a charitable institution are fiduciary, regardless of the identity of the person or persons on whom the rights are conferred. Therefore this applies to both individual and corporate members". (Members may find this page on membership charities of interest).

Since our current operation is fully in line with the objectives of the Trust and we are supporting the trust, I don't think there any major current issues. However separating the two could be difficult. I think any good lawyer could demonstrate that we control the Trust and therefore are responsible for it with a fiduciary duty to it.

Wikipedia says "A fiduciary duty is a legal or ethical relationship of confidence or trust regarding the management of money or property between two or more parties, most commonly a fiduciary and a principal. One party, for example a corporate trust company or the trust department of a bank, holds a fiduciary relation or acts in a fiduciary capacity to another, such as one whose funds are entrusted to it for investment. In a fiduciary relation one person, in a position of vulnerability, justifiably reposes confidence, good faith, reliance and trust in another whose aid, advice or protection is sought in some matter. In such a relation good conscience requires one to act at all times for the sole benefit and interests of another, with loyalty to those interests".

Thus it can be argued that with the present arrangements the Council's duty to the "Trust" are stronger than its duties to the "Club" and its members. Bringing the Trust into the Club as a single membership charity would eliminate the problem.

2. Combine as a single charity.

I think the main points in favour have been set out above. It would be as we are, plus the full benefits of charitable status.

3.Unbundle the Club.

Simon L6 may disagree with my analysis but this is what I think he is proposing.

This is a well known business strategy, but it has its pros and cons.

By way of an example lets take package holidays. These are a classic "bundled" deal. The package holiday (from Wikipedia ) consists of transport and accommodation advertised and sold together by a vendor known as a tour operator. Other services may be provided like a rental car, activities or outings during the holiday. Transport can be via charter airline to a foreign country. Package holidays are a form of product bundling.

Now all these services can be purchased separately and (if you do the necessary searching) at a lower cost. Many people do just that, particularly with the internet and some firms enter the market providing some parts of the package at low cost. However, whilst they may have suffered some loss of business the package companies are still in business because the consumer appreciates the benefit of not having to sort everything out and the protection offered by the package provider in dealing with any disputes with suppliers.

The CTC offers a similar package of benefits which members see benefit from but every member will place a different value on each benefit.

In fact I think we could go further than even Simon L6 proposes.

third party insurance costs about £3.50 a member
Since many people have this with their house insurance and it can be purchased separately - why bother including it in the bundle?

the legal advice line can be had for free
There are many companies advertising free no win no pay legal advice so why bundle this in?

the rides leaders insurance costs next to nothing
Why not move to an affiliated groups structure, and then, to save more cost and admin., suggest they affiliate to British Cycling. That's another cost eliminated.

the mag costs just over £2 a member
Why not do a deal with Cycling Plus for an pdf version only? They should pay you.

campaigning costs about £3.50 a member
Seems expensive to me. My local cycle campaign is £2p.a. £1.p.a. for low income members. Possibly better to leave it to cyclenation and take out some more cost?

the administration of the membership service costs about £4.50 a member
Not being very radical here. Move to a server with http://www.phplist.com%20/ which is open source (so free) and members can do their own admin. We can drop those high cost members who are not on the internet.

RtR support and support for DAs is a tricky thing - skilled staff spend a lot of time shuffling paper, but I would say that the value of it is about £2 a member
Many member aren't interested in campaigning. Why load them down with this cost. Get them to support their local campaign group if they so wish and co-ordinate through cyclenation. We can let the DAs keep their funds and affiliate where they wish. Another cost gone.

I hope readers will have worked out that I am being facetious - to make a point. The CTC offers a package of benefits to its members. The value each member puts on each aspect, whether it be supporting Bike Clubs, 3rd party insurance, Cycleclips, Keep Posties Cycling, the Mag., the companionship of the local group, Chris Juden, the excellent rides organised by Simon L6 etc. etc varies from member to member, but overall each member must see the package of value or they would have left. Since our membership is at record levels I suggest that we must have been doing something right and the current package is reasonably attractive.

I seem to recollect that there are something like 6m people using bicycles regularly in the UK. With out membership of 60K I would think there is room in the market for the "CTC Bundle" together with any cut down service that Simon L6 would like to introduce.

That said I believe there is room for improvement and we will need to continue improve and evolve in the future.

Now lets turn the the practicalities of "unbundling". In this case unbundling the "Trust" from the "Club". I speculate.

Let's assume for the sake of discussion that Council decides it will cease funding the "Trust" in 6 months and want any loans repaid.

I suggest that immediately the Trustees of the Trust would be in a nearly impossible situation with an obvious conflict of interest. I surmise they would have to cease attending Council meetings and committees and take legal advice as to the best way to deal with the situation.

Currently the Council elects the Trustees and is the sole member of the Trust. If it was no longer supporting the charity it would be in a difficult position in law, bearing in mind that as a member it still has a fiduciary duty to the Trust. I think Council would have to pass membership to another body or group. Possibly the most equitable way forward, bearing in mind that the Trust was set up using the Club's assets would be to make all members of the Club also members of the Trust.

The Trustees would then be appointed by the members and the new Board could then set subscription rates and set about managing itself independent of the "Club". It would be an excellent way of dividing both the organisation and the membership.

In any event, I believe there is a great danger that lawyers will be involved if we were to go down that path at great expense to all parties (which are all part of the existing CTC).

It would be interesting to learn how SavetheCTC propose to take forward the separation of the two bodies and what they think the CTC (Club and Trust) should look like in say 5 years time.

Sorry to have gone on at such length. As you will have gathered, I think the only sensible solution to the present situation is to become a single membership charity as proposed by Council.

Hi Jonty,

Thanks for responding, think I need to try and make sure that we understand the position (and that said I can be wrong so I hope other contributors will point out where this is so).

Jonty wrote:Basically what happens is that the Club provides grants to the Trust to undertake services on its behalf but for perceived financial reasons dresses them up as loans. I think I now understand this issue and thanks for your help.

I must apologise as it is clear that I haven't managed to set out the situation clearly enough.

Jonty wrote:It seems to me that although the "loan" to the Trust may technically be a "loan" it is actually more like a grant. The rate of interest charged is not a commercial rate but more akin to a "peppercorn". As far as I'm aware the repayments don't include capital repayments and there is no term specified as to when the loan should be repaid.
So, in effect, calling it a loan may be technically correct but it is misleading and it certainly has not been provided at a commercial rate of interest.
As you have said the reason for doing this was that the Club "choose to put it in the accounts as a loan so that if there was ever a need the Club could get the money back out of the Trust..."
Where or not the strategm of dressing up what is essentially a grant as a loan would offer this possibility is another matter. How could the Club get its money back when the Trust has no money?

The "Club" does lend the "Trust" funds which show in the accounts as loans and are in fact loans. You are quite right that there is no formal repayment date and the interest rate is nominal. Whilst the "Trust" many not have cash, it has assets that could be turned into cash - National Office. It could raise a mortgage on the offices of do a leaseback deal where it sells the freehold for cash and takes out a lease on agreed terms so that it can continue to use the building.

Probably the best way to think of this is as a family. If you were rich and had a son who wanted to buy a house who could afford the mortgage but did not have the finances to furnish it, you might well choose to lend him sufficient money to do the furnishing at a nominal rate of interest and without formal agreement as to repayment. You would want to leave it as a loan so that the funds would be available for your wife who you think might outlive you and to save complications with gift/inheritance tax. It would still be a loan and in extremis you could demand repayment from your son and expect him to take out a second mortgage to do this.

As an alternative you could keep your money in the Bank and your son could borrow more from the Bank on an unsecured Personal Loan. You would get a peanut rate of interest on your money and the Bank would charge your son quite a high rate of interest. By trusting each other and keeping it in the family you save a lot of money.

The "Club" does make grants/subventions/donations - however you want to describe it which cannot be reclaimed from the "Trust" once made.

I attempted to explain it with this "the cost of management and membership services supplied to the Club by the Trust was £1,290K. Basically this was for all of the activities that were carried out that would have been within the traditional remit of the CTC before formation of the Trust. All but 4 of the staff are employed by the Trust and the Offices are owned by the Trust, so you can see that very little happens under the auspices of the original CTC. The services provided by the Trust include administration, I.T., the website, campaigning, information, volunteer support, media relations, marketing and fund raising.

These cost are covered by a direct charge to the "Club" of £407K, which is the figure for services which are not covered by the current charitable objectives of the Trust. Any costs that can be deemed within the charitable objects of the Trust are left with it. The balance of £883K is met by the subvention (some refer to it as a donation) from the Club to the Trust of £453K together with the funds generated by the Trust of £430K".

Whilst with the present governance arrangement I don't believe that the "Club" could avoid responsibility for the "Trust" it would be possible over time and acting in what the law would regard as a "reasonable" way to separate the two entities. As commented in the "My Opinion" topic by Simon L6, it would be possible to have an alternative strategy.

Simon L6 wrote:..... In fact, wouldn't we be better off retrieving all the money that we've lent the Trust (setting aside the £1.4M building we gave them) and sending them on their way to enter in to as cosy a relationship as they like with government while we do the stuff we do best.....

Bearing in mind that the "Club" has a fiduciary responsibility for the "Trust" this would take several years and great care would have to be taken to ensure that the "Trust" was not disadvantaged. However by then all the "contracts" Simon L6 is so concerned about will probably be history and we will still want IMHO to carry on all the other activities of the "Trust".

I believe we can do all the things that are set out in our objectives in the M&AA as a charity and that it is simply perverse not to do so. We are effectively already running as a charity to all intents and purposes without taking all the benefits.

Jonty wrote:I take your point that from a financial point of view the issue is largely irrelevant as for financial purposes the Club and the Trust are treated as one entity in the consolidated accounts. But surely you can see how misunderstandings and mistrust can arise if something which is more like a grant is described as a loan and if an interest rate of 0.5% is described as a commercial rate of interest which it clearly is not?

Re. the commercial rate, I must apologise, I did not have correct information.

Regards,

John

Simon L6 wrote:

John Catt wrote:

workhard wrote:
As the skinflint Concillor who suggested that members pay their own postage on this poll, it is because it doesn't make any difference and ERS costs money.
........Read the submission form from the proposer and the unedited submission to Cycle and judge what you think it is about.

At best this is an "opinion poll".

Regards,

John

John, people say nice things about savethectc's campaigning skills. It's flattering, but frankly statements like this make our task a good deal easier. If Resolution 8 is defeated by a poll of the entire Club then the merger with the Trust is dead. That's why you and others are using every lever at your disposal to swing the vote, and having the named ballot papers sent to National Office is one of those levers. There are staff members who would vote against the resolution in a secret ballot who just won't dare not to vote in favour because their boss is going to be checking the ballots.

For the record as far as I am aware putting addresses on the ballot papers or a secret ballot never came up at Council and as far as I can recall I wasn't consulted on the issue. You may have a point. The advantage of the system as set up is that people could if they wish check up how their vote had been recorded. The M&AA say nothing about a secret ballot so perhaps you might like to put an amendment to the next AGM. Somehow I don't think staff votes will swing it.

meic wrote:Do some councillors have to stand for re-election before then, by any chance?

We had elections this summer after the AGM. If I recall correctly 3 were elected unopposed and of those where there was competition both the incumbents were re-elected.

SavetheCTC are very good at being the "Loyal Opposition" but don't appear to have any candidates for Council.

Regards,

John

[quote="Regulator"}
John
Go and read the Mem & Arts. You clearly don't understand the Article 36 procedure.
[/quote]

36.A poll of the whole Club shall be taken if either one third of the members of the Council or 200 members of the Club shall within three months of the passing of a resolution in a Council Meeting or General Meeting lodge with the Secretary a petition in writing signed by the petitioning members Protesting against such resolution and Containing a requisition that a poll of the whole Club be taken upon such resolution.

Upon receipt of the petition the Secretary shall publish in the next issue but one of the Club magazine to be distributed after the petition shall have been lodged with him full details of the petition and incorporate a voting slip therein specifying the date (not being less than 28 days after the date of publication) when all votes must be received by the Secretary. When voting has closed as aforesaid the votes shall be counted and the resolution confirmed or rescinded in accordance with the majority of votes cast. If the voting be equally divided the resolution shall be confirmed. Provided always that any action taken upon such resolution prior to receipt of such petition shall be valid.

37.All decisions arrived at by a poll of the whole Club shall bind the Club and the Council for six months

Can't see where I am wrong on article 36. If the poll succeeds it will be off the agenda for 2011 but not for 2012 by my reading. Another resolution in favour of charitable status would be required along with one amending the M&AA. However the motion in favour would be the minor hurdle, compared to the 75% required to amend the M&AA.

Regards,

John

workhard wrote:

workhard wrote:Any clue as to why this vote is not being done via Electoral Reform as per first time?

So I'll ask again.... WHY the lack of independent scrutiny of the forthcoming vote?

As the skinflint Concillor who suggested that members pay their own postage on this poll, it is because it doesn't make any difference and ERS costs money.

Without the 75% vote to change the M&AA nothing can happen. This poll has no bearing on whether or not we become a charity. If passed it will only effect the 2011 AGM as it is only effective for 12 months. The 2012 AGM will be outside the time limit and Council has not proposed to return to the issue at the 2011 AGM.

Read the submission form from the proposer and the unedited submission to Cycle and judge what you think it is about.

At best this is an "opinion poll".

Regards,

John

Simon L6 wrote:......the second big question is where is the money going? And that's not easy to answer because historically the CTC didn't properly account for staff time, which is where the bulk of the cash goes. Suffice to say that some of us, having seen what passes for 'the books' don't have any confidence in the accountst.....

Simon, please clarify that you are referring to Management Accounts (the way costs are allocated to activities [an art rather than a science]) and not the audited accounts.

Our auditors would not be very happy (nor I suggest some of the SavetheCTC supporters who have been through the figures at a low level and confirmed they were content with the audited accounts) at such an aspersion.

Regards,

John

Simon L6 wrote: John - thankyou. I think you've set out the case for keeping the Trust at arms length in one handy sentence. And your dismissing the Trust coming to the members for a quarter of a million quid as a thing of no importance....

I'm not saying the a quarter of a million is of no importance, but I regard the Club and the Trust as being the CTC - and this is what we show the outside world in our consolidated account. So that "within the family" it does not matter. It would appear that you would like to divide the bodies and have two separate organisations. I want one combined charity able to promote non competitive cycling in the UK to maximum effect. I think we already have enough separate cycling organisations.

Simon L6 wrote:So - to recap. The Trust has been given a building that was worth £1.4million after Councillors were given all of fifteen minutes for consideration. A further amount, close on £400,000 was loaned. The Club then pays £30,000 a year to the Trust to rent part of the building that it gave the Trust. I suggested that the Trust is now after another loan of £250,000 because its income is going to fall off a cliff following the end of the Cycle Champions income stream - and you, John, appear to have confirmed this. So we're looking at about two million quid - although the National Office building is now worth a lot less than when we gave it away. Nice work if you can get it.

I can't comment on what happened in the past. I only became a Councillor w.e.f. 1/1/10. I take things as I find them and try and work our the optimum solution. From what I have seen so far it would seem that it has always been acknowledged that contracts could end, so that people have been employed on that basis. I believe it should be possible to "down size" without a financial disaster if necessary. The main problem will be the lack of contribution to overhead from contract income that may reduce what we have available for the more traditional services. I think we would have been worse off (as a combined organisation) if we had not taken the contracts and we would have missed the opportunity to promote cycling.

If you want to get the Trust assets back within the direct control of Council (elected by the members as now) then we need to merge as proposed.

Simon L6 wrote:Here's how I see it. The Trust is going to get squeezed. It's in a declining market with only one major customer, and it faces increased and sharper competition from transport consultancies who are a) quicker and b) brighter. It's acting as a (not entirely honourable) middleman in the training business which again is going to be squeezed and in which, in any case, it has no special expertise. None of this looks good. Wouldn't it be quicker to just burn the money?

In which case we contract services so as to keep our costs within our income. We have already had to do some of this. It doesn't mean that we are facing a disaster. just problems, as I am afraid always apply though out life.

Regards,

John

Hi Jonty,

Jonty wrote: Can I ask if the loan from the Club to the Trust is at a commercial rate of interest why did the Trust not obtain a loan from a bank also at a commercial rate of interest?

Quite simply Banks borrow at low rates and lend at high. If the Trust borrowed at Commercial Rates, say 5%, the Club would have cash to lend back to the Bank at say0.5%. The Bank would love it, but I don't think it would make sense if you regard the Trust as being part of the CTC.

Jonty wrote:Why is the Club acting as a banker and providing a service which could be obtained from a bank? Surely in the present low-interest environment it would be sensible for the Club to hold on to its assets (cash in this case) and for the Trust to take out a commercial loan from a commercial institution - a bank - at a commercial rate of interest by mortgaging the National Office.

See answer above. In the present uncertain times holding any asset is to some degree risky. We could put the money in to shares but that would be quite risky IMHO and since we control the Trust I don't think we would avoid liability in any case.

Jonty wrote:Surely to make financial sense the rate of interest charged by the Club must be a subsidised rate rather than a fully commercial rate? In other words it's a "soft loan" provided by one body to another related body at a lower rate of interest than a true market rate. In effect it's basically a cross-subsidy the value of which is the difference between the interest rate charged by the Club and a fully commercial rate.

We can go for whatever rates we would like to negotiate between the bodies. it won't make a blind bit of difference when you get to the consolidated accounts.

Did you pick this up in my blog? http://witherthectc.blogspot.com/2010/02/question-re-message.html

"the cost of management and membership services supplied to the Club by the Trust was £1,290K. Basically this was for all of the activities that were carried out that would have been within the traditional remit of the CTC before formation of the Trust. All but 4 of the staff are employed by the Trust and the Offices are owned by the Trust, so you can see that very little happens under the auspices of the original CTC. The services provided by the Trust include administration, I.T., the website, campaigning, information, volunteer support, media relations, marketing and fund raising.

These cost are covered by a direct charge to the "Club" of £407K, which is the figure for services which are not covered by the current charitable objectives of the Trust. Any costs that can be deemed within the charitable objects of the Trust are left with it. The balance of £883K is met by the subvention (some refer to it as a donation) from the Club to the Trust of £453K together with the funds generated by the Trust of £430K".

Regards,

John

Hi Simon L6,

Simon L6 wrote:the word on the street is that the Trust is asking the Club for a £250,000 bridging loan to cover the cost of running Cycle Champions past the end of the contract. Now, I may be wrong about that, but Simon Connell and John are well placed to correct me if I am wrong...

This may well be so. So what? See my response to Jonty. If we run the the organisations in tandem it won't matter, because I don't believe the Club could avoid the liabilities of the Trust.

Simon L6 wrote:And John - if the Club retrieved part of the building by way of redeeming the existing close-on-£400,000 loan, would the £30,000 rent that the Club pays to the Trust be reduced?

In Law you have two different legal entities, though the control of these is not so clearly differentiated. The financing of the Trust is one issue. It can borrow from the Club, the Bank or anybody else who will lend to it or give it grants.

If the Club want office space it can choose where this should be and on what terms it is prepared to rent.

They are two separate issues.

Simon L6 wrote:Oh - talking of £30,000 - how much did the staff conference cost?

I'm sure that putting my old finance hat on and allocating for management, lost salaries of participants during the period of the conference and for travel, communications, hotel cost and allowance and travel (plus some other things I haven't thought of) i could no doubt get the cost up to over your £30K.

Are you suggesting that we shouldn't train and motivate our staff and arrange for the exchange of ideas and best practice?

From my perspective it appears to have been good value. You may have a different view and ideas.

Regards,

John