CTC Charity Application Rejected

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Re: CTC Charity Application Rejected

Postby admin » 29 Oct 2011, 4:13pm

Simon L6 wrote:2. publishing the name of the official is entirely appropriate. She's a public servant.


Just to note that I've removed the name of the official, just because I don't think a single official would be making the decision on their own. It should be possible to gain any information that's publicly available by phoning the Commission and quoting the reference number, so I don't think the official's name is needed.

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Re: CTC Charity Application Rejected

Postby robgul » 29 Oct 2011, 6:27pm

The website issue in the context of the Charity Commission rejection is an interesting one ...

My understanding is that the whole website project is in major dispute with the development contractor ... is there any progress on a date (that can be believed) for the new site? ... and it will be interesting to see how the structure looks if it needs to be "charity-ish"

The long-awaited new site seems to be rather like the proverbial Postal Order that Billy Bunter was always expecting to arrive from Bunter Court !

Rob

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Re: CTC Charity Application Rejected

Postby peter99 » 30 Oct 2011, 4:37am

Kevin Mayne wrote:
The Charity Commission rejected our first application because they have some concerns that we will need to address before we can go ahead. We are going to take some additional advice about the best way forward from here, including how we handle the different approaches taken by the Scottish and English regulators.

It’s not a show stopper in anyone’s mind and its certainly not something I assumed we would be putting on the web site

Sorry if the actual story is somewhat underwhelming,

Kevin Mayne


What a pity the only place the members of the CTC can find out the reason of refusal is on a backwater thread on a forum started by a random forum member.
An even bigger pity that the reason given of nothing being on the CTC main news page is that the members are bored with boring information about these apparently piffling matters of admin.

I respectfully suggest, Sir, that you have a fast sea change of respect for your fellow members, membership fee payers and stakeholders in your organisation, many of whom read more than the Daily Star and wish to promptly have information on the members website on matters important as this.

A complacent and disdainful culture towards members in any organisation usually results in an uprising eventually against the hierarchy as happened against the very soon ousted CEO of the British Association of Ski Instructors a few years ago.

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Re: CTC Charity Application Rejected

Postby Karen Sutton » 30 Oct 2011, 9:37am

Kevin Mayne wrote:
Member groups.

Thanks for the posts in this area.

In 1973 member groups were financially and constitutionally separated from the Club. This eases the burden in accounting and audit terms and also removes them from the Club’s VAT registration – no VAT on entry fees and cups of tea for example.

This means that at present the groups are outside the Club’s charitable registration. The Council has said they will consult on what happens next after the Club’s registration and merger with our charitable trust. The only current change is that the annual grants are now money leaving a charity, so the Trustees have to prove that this is for the Club’s charitable purposes. Running a CTC member group in all its forms meets that test as far as we know, but it just has to be stated clearly.

There is now an active member groups committee advising the Council and staff on groups’ policy. Participation is open, if you or someone you know wants to be involved please put their name forward. I’m not aware that anyone has raised the issues in Karen’s post, if you want the group to discuss this Karen please contact me directly.

I hope these comments help.


Thank you Kevin,
I will contact you directly about this as I would like to be clear on some points before our Group AGM this coming Thursday. One of the main points I wish to know about is how Member Group activities can be considered charitable when the main focus of most Member Groups is organising rides for CTC members. I know that our Group does not carry out any activities which could be deemed charitable. Even our rides are only for Members of CTC except for a few initial guest rides. This policy has always been encouraged by CTC. I also cannot see how Trustees will be able to prove that the annual grants to Groups are being used for charitable purposes. Having looked last week at our accounts for 2010/2011 I cannot see any spending which can be deemed "charitable." It would seem therefore that any attempts to register the Club as a Charity may be fruitless?

I look forward to speaking with you this week.

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Re: CTC Charity Application Rejected

Postby cyclamity » 31 Oct 2011, 11:15am

Arising from Mr Mayne's comments on 29 October, do we begin to get a glimmer of another major problem? It was hinted at in his first statement: " We are going to take some additional advice about the best way forward, including how we handle the different approaches taken by the Scottish and English regulators".

We now have the astonishing and, insofar as I am aware, hitherto undisclosed claim that, following its registration in Scotland, the CTC Club in England and Wales "is now required to ensure that the Club is solely charitable in purpose, regardless of where in the UK it operates". In other words, despite rejection of the CTC's application by the Charity Commission, the Club is now, to all intents and purposes a charity, because of its registration in Scotland, and subject to Scottish law.

I am no lawer, but this claim requires some legal clarification to the membership. Is this really true? An application for charitable status in England and Wales is made to the Charity Commission and rejected. However, an application by that same organisation not a charity, made to the Office of the Scottish Charity Regulator (OSCR), is accepted, which de facto makes the CTC Club a charity in England and Wales; in Mr Mayne's words: "required to ensure that its purpose is solely charitable".

Charitable status is denied by the CC in England and Wales, but accepted by the OSCR in Scotland. What monster has been born of this unholy congress?

Can somebody pleade explain the Charity Commission's guidance on 'English and Welsh charities working in Scotland'? Under the heading 'Can Scottish charities register with the Charity Commission as well?' the guidance states: "No. A Scottish charity is one that is set up under Scots law and registered with OSCR. This means that we cannot register Scottish charities. We can only register charities that are established under the law in England and Walesa and so are subject to our jurisdiction'.

By the definition above, it would seem that, if the this charity was set up under Scots law and registered with OSCR, the CTC is now a Scottish charity. Was it set up under Scots law? If registration as a charity in England and Wales had been obtained first, perhaps there would be no problem.

As for the Charity Commission's letter of rejection, that I would expect to be a reasoned justification of its decision, not a negotiating stance. In the light of the present ambiguity of the CTC's constitutional status, it is now even more crucial that members see what the CC letter says.

For those with more than a passing interest, here are two links, one to the Charity Commission and one to the CTC entry (29 August 2011) on the OSCR register of charities. I'm sure that there must be some very good reason why the CTC's gross income is recorded as £0 and that of the CTC Charitable Trust as £4,535,101.

http://www.charitycommission.gov.uk/Charity_requirements_guidance/Your_charitys_activities/Working_internationally/working_in_scotland.aspx

http://www.oscr.org.uk/search-charity-register/charity-extract/?charitynumber=SC042541

There does seem to be a puzzling and obdurate refusal to be open with members that is corrosive of trust and confidence in what is being done in their name. It is so unnecessary.

I apologise for the length of this post and for my legal naivety. I am just trying to understand.

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Re: CTC Charity Application Rejected

Postby Karen Sutton » 31 Oct 2011, 12:59pm

I did speak with Kevin this morning and he made the point that cyclamity has raised; that as CTC is registered as a Charity in Scotland that charity status covers England as well. So it is not necessary to re-submit the application to the English Charity Commission.

Regarding Member Groups, Kevin has said that their activities will be deemed charitable as they are running community cycling clubs and that although not all groups run events open to all there are enough such events run by MGs countrywide to cover the charity requirements. Kevin therefore sees no reason why the MGs should not be absorbed into the CTC charity. Regarding funds given to MGs by CTC, as long as they are used for running the Groups this will be regarded as charitable spending.

I am still uncomfortable about the situation CTC is now in, as cyclamity has pointed out, our Membership charity is registered under Scottish Law. we need to know if efforts will be made to change this. Is it important?

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Re: CTC Charity Application Rejected

Postby thirdcrank » 31 Oct 2011, 1:24pm

Karen Sutton wrote:I did speak with Kevin this morning and he made the point that cyclamity has raised; that as CTC is registered as a Charity in Scotland that charity status covers England as well. So it is not necessary to re-submit the application to the English Charity Commission. ...
Does that mean that making two applications was an each-way bet or, that in spite of all the excellent professional advice on the charity conversion issue, the news has come as a surprise? The absence of any mention of this in the statement made suggests the latter.

I thought that some years ago the CTC formed a number of separate companies such as CTC (Scotland) :?

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Re: CTC Charity Application Rejected

Postby Regulator » 31 Oct 2011, 1:36pm

CTC needs to be careful. It is not a Scottish charity. The terms ‘Scottish charity’ or ‘registered Scottish charity’ are reserved for bodies established under the law of Scotland or managed or controlled wholly or mainly in or from Scotland.

CTC is established under English and Welsh law, and is managed or controlled wholly or mainly in or from England. Other charities have come unstuck where they have failed to gain registration in England and Wales.

CTC should ensure that it takes specialist advice - and perhaps from someone other than whoever has been giving them advice so far, seeing as that hasn't exactly been that successful.

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Re: CTC Charity Application Rejected

Postby Karen Sutton » 31 Oct 2011, 2:40pm

thirdcrank wrote:
Karen Sutton wrote:I did speak with Kevin this morning and he made the point that cyclamity has raised; that as CTC is registered as a Charity in Scotland that charity status covers England as well. So it is not necessary to re-submit the application to the English Charity Commission. ...
Does that mean that making two applications was an each-way bet or, that in spite of all the excellent professional advice on the charity conversion issue, the news has come as a surprise? The absence of any mention of this in the statement made suggests the latter.

I thought that some years ago the CTC formed a number of separate companies such as CTC (Scotland) :?


CTC is indeed split into several different companies, full details of which can be found on the website:


The Organisational Structure of CTC
CTC is a company limited by guarantee. This means that it is a legal company, registered at Companies House (as “Cyclists’ Touring Club”), and covered by company law. Unlike most companies in the UK which are limited through the issue of shares, a company limited by guarantee only calls on its “shareholders” (known as “members”) to contribute if it ceases trading. Members are then called upon to contribute to meet the company’s debts up to the limit set out in its constitution. All CTC members are “members” of the CTC company. This means that all members are legally entitled to receive the Annual Report and Accounts (which is why they are included in the magazine), to attend and vote at the Annual General Meeting, and to contribute up to ten shillings if CTC ceases trading and cannot meet its debts.

CTC has also set up a number of trading subsidiaries. The two main subsidiaries are Cyclists’ Touring Club (Central) Limited and CTC Cycling Holidays and Tours Limited. Cyclists’ Touring Club (Central) Limited runs CTC’s events such as the Challenge Rides and CTC Cycling Holidays and Tours was set up to run CTC Tours as a properly bonded tour operator. There are two further subsidiary companies, Cyclists’ Touring Club (Sales) Limited and CTC Cycle Racing Limited. Both of these companies are “dormant”, which means they are not trading. All of these companies are limited liability companies with the whole share capital owned by CTC.

There are four further subsidiary companies, again limited liability companies with the whole share capital owned by CTC. They are Cyclists’ Touring Club (Eastern) Limited; Cyclists’ Touring Club (Northern) Limited; Cyclists’ Touring Club (Southern) Limited; and Cyclists’ Touring Club (Western) Limited. These four companies are “holding” companies for the CTC Member Groups and Regions. Having the Member Groups within these companies means that the they have the protection of limited liability, but are not constrained by some of the legal requirements that applies to CTC such as VAT. Because Member Groups operate very differently to the other companies in the CTC “group”, the accounts of the Member Group companies are consolidated (grouped together) separately in CTC’s accounts.

There is no mention of CTC Scotland here. It seems from the CTC website that it is classed as a "Region" along with CTC Cymru. There is no indication as to whether they are included in any of the companies mentioned in the quoted text above or not.

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Re: CTC Charity Application Rejected

Postby Simon L6 » 31 Oct 2011, 2:48pm

I think we could get a little bogged down in the detail here. There is, I am sure, no intention to merge the CTC and the CTC Trust to become a Scottish charity. And it may well be that the ground shifted underneath the feet of the application between the re-draft of the Memorandum and the application.

It's simply that we're not getting the full story. Publication of the Charity Commissioners' letter is vital.

Kevin Mayne
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Re: CTC Charity Application Rejected

Postby Kevin Mayne » 31 Oct 2011, 2:59pm

Thanks to the various posters on the Scotland/England dilemma.

The relevant AGM motion said “This AGM authorises Council to take the steps necessary to register the Club as a charity with the Charity Commission for England and Wales, the Office of the Scottish Charity Regulator and the Charity Commission for Northern Ireland and to merge the Club with CTC Charitable Trust to become a single, charitable organisation.”

It is not just been an issue for us, many charities work in both jurisdictions. In the past UK charities only needed to register with one but the rules changed some years ago so we have to register in Scotland in order to operate there, but apparently not vice versa. Greg (Regulator) summed it up best – we need more advice on how we handle this.

However I can confirm the point that the Council has been bound to ensure CTC acts as a charity since the AGM passed a motion telling it to, that much has been consistent in all the advice we have had. Council has not made a change in policy or direction that I can report as a result of the current rejection by the Commission, the AGM motion requires them to continue down this path. The way it happens may have to change to reflect circumstances, we don’t know until we get that additional advice.

Those with a really detailed interest in the subject may have seen last weeks Select committee hearing into the Charity Commission which does highlight how the way they work and the details of around charity regulation are still evolving.

http://www.bbc.co.uk/iplayer/episode/b016xd7j/Select_Committees_Charity_Commission_Committee/

Useful chat with Karen this morning about member groups, thanks.

The only additional point I would make to her post is that while we have extensively considered the way MGs might fit into the charity the one thing we know with MGs is that they are all different in what they do and how they do it. So when it comes to considering the groups Council has taken the view that it will proceed cautiously and only consider this once the other processes are complete.

CTC Scotland is not a company, structurally it is a Member Group.

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Re: CTC Charity Application Rejected

Postby Simon L6 » 31 Oct 2011, 6:29pm

the news I'm getting is that at least three councillors have still not seen the letter

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Re: CTC Charity Application Rejected

Postby Regulator » 4 Nov 2011, 7:20am

Simon L6 wrote:the news I'm getting is that at least three councillors have still not seen the letter



They're obviously not in The Clique...

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Re: CTC Charity Application Rejected

Postby Regulator » 7 Nov 2011, 2:15pm

Hmmm... another issue of 'Cycle Clips' and no mention of this matter.

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Re: CTC Charity Application Rejected

Postby iron legs » 9 Nov 2011, 1:18am

What a mess. I have to say that I voted against the move to making the CTC a charity. Some of the subterfuge has come to light, like the membership fee being hiked to support the CTC charity over the years, the increasing annual amount of the members money used for this, and without explaining clearly this was going on.

I really think this is a case of ambition and ability on the part of Mr Mayne and his cohorts. The ambition to make the CTC into something which it should never be - a charity, based I suspect on 'questionable professional advice of consultants motivated by a chance to make a lot of money out of the CTC', and the ability of the CTC governance to actually deliver what they have actually proposed. The economic reality of the current financial mire in which our economy has inexorably sunk seems to have passed the leadership by, on planet Tron, or wherever they gaze at blue skies to do their thinking. Sources of funding from Government are drying up and will continue to be so, for at least the next ten years. Quangos are being killed off in the relentless drive for economy and with them other sources of funding. The gravy train has well and truly hit the buffers. Where is the money to come from to fund the much vaunted aims and ambitions as external funding/donations dry up? The rank and file (if they can afford it!). Therefore be prepared for more membership fee price hikes and a reduction in benefits in the relentless drive for 'streamlining', as and when the whole project begins to unravel. For the public to donate, they have to believe in the aims of and support the charity. Does the CTC have popular support with membership well under 500,000 in a population of over 62 million? Is Mr Mayne going to organize regular street collections to solicit public contributions to his grand scheme, or will regular begging letters be send to cycling clubs seeking funding to run his leviathan? Can the CTC continue to rely on 'Gift aid' if the govt decides to tighten up the rules at a budget?

How is this new 'charity' going to deliver on campaigning/lobbying in three regional assemblies and a London parliament? Where will the bulk of the campaigning money be spent? Will the registration of the CTC in Scotland allow the organization to spend most of it's income outside Scotland? Will this be reflected in the charity accounts in Scotland? Has it been explained that if the CTC is a registered charity in Scotland and does become a registered charity in England & Wales, then separate accounts will have to be filed in each legal jurisdiction for legal/tax/accounting purposes? How much will this cost?

I see BC is now moving to be the sole cycling body to represent cyclists when dealing with the Westminster government. They obviously see the CTC is in trouble. BC doesn't exactly have a glowing record either, and they cannot speak for Northern Ireland.

I am not convinced by MR Mayne's arguments, or the need to make the CTC a charity. I firmly believe that clear heads have not prevailed, despite some CTC members being very able to see the glaring pitfalls. A bit like the case of Neville Chamberlain in 1938, 'Peace in our time'. As far as the charity argument is concerned, it is hard to make a mouse believe a black cat is lucky. The whole thing is a mess. I waited to see how quickly/smoothly the whole process would go. My scepticism has been justified. I will stick by my beliefs and principles too. I will not renew my membership.