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On 12 March 2025 the Policy Review and Performance Scrutiny Committee considered how Cardiff Council manages charities and trusts where it acts as trustee, and heard from the Charity Commission and an outside consultant. It also reviewed progress on the Council's Participation Strategy 2023-27. The Committee agreed that the Chairperson will write to the Cabinet Member with its observations and recommendations on both items.
Apologies had been received from Cllrs Elsmore and Wild
None
Decision as recorded
AGREED: that the Chairperson, on behalf of the Committee, writes to the Cabinet Member conveying the observations and recommendations of the Committee when discussing the way forward.
The Chairperson advised that in March 2024, the Council’s Cabinet agreed new governance arrangements for trust decisions where the Council is acting as trustee. The new arrangements introduced a process for the consideration of trust matters separate to ordinary local authority business, in the form of a Trusts Cabinet Committee. Members were reminded that a requirement to review trusts governance arrangements followed the Council facing a conflict of interest in 2023 (in respect of Maindy Park). This item allowed Committee to consider the progress the Council has made since reviewing its arrangements to manage charities and trusts registered with the CharityCommission for England and Wales. This item also provided Committee with an opportunity to take advice from external experts and bodies on best practice and how the new arrangements compare. Attending the meeting as witnesses were the Council’s internal Legal team - Debbie Marles, Director of Governance & Legal Services & Monitoring Officer and Richard Crane, Principal Solicitor; Representatives of the Charity Commission for England and Wales, Parliamentary Team: James Wilkinson, Tracy Howarth and Elizabeth Tusdard, and Dr Martin Price, a local consultant with extensive experience of the issues and challenges surrounding governance where a local authority is acting as a Trustee. The Council’s internal Legal team (Debbie Marles, Director of Governance & Legal Services & Monitoring Officer and Richard Crane, Principal Solicitor) were invited to share the Council’s progress, after which the Chairperson invited questions and comments from Members. Members asked questions around conflicts of interest, both in relation to the Monitoring Officer’s role and also for Local Authority Members. A discussion took place regarding conflicts of interest and conflicts of loyalty and the key points are summarised below: - When the Council faces a serious conflict of interest, approval from the Cabinet Trust Committee is required. - The Monitoring Officer recognises that her role may be compromised by conflicts of interest. In the event of a significant conflict, she will arrange for external legal advice for either the Cabinet Trust Committee or the Cabinet, ensuring separation of legal advice. - Significant conflicts are defined within an ethical framework, with Local Authority Members trained in the Members Code of Conduct. They understand issues can be of personal and prejudicial interest. - Members acknowledged the varying scales of conflicts of interest experienced in the past and received assurance that current mechanisms enable the Council to differentiate between significant and low-risk conflicts. Charity Commission guidance clarifies what constitutes a serious risk. - Members welcomed the draft Conflict of Interest policy, considering it robust. - Referring to Appendix 1, paragraph 17 (iii), Members noted that defining conflict of loyalty is challenging. Cabinet Trust Committee members have loyalties to the Cabinet, their wards, and constituents, making loyalty difficult to define. Officers believe that having five Members on the Cabinet Trust Committee provides flexibility. They anticipate few serious conflicts, with most being low-risk and loyalty-based. - Training in Declarations of Interest, particularly in conflicts of loyalty, will be necessary to enhance understanding. - The Monitoring Officer clarified that Fields in Trust are distinct from Charitable Trusts and are not listed in the Council's register of assets database for charitable trusts. Fields in Trust do not create a Trust conflict. - Members inquired about the implications of having a Fields in Trust in their ward. Officers offered to share the application to illustrate its workings. - When a trust makes decisions with commercial implications, the charity's objectives are tied to its purpose, and the Council cannot use it for any other purpose. Proper advice must be sought from qualified professionals regarding financial implications in matters of land and property. Members discussed and raised questions about Independent Trustees. They noted that the concept of independent trustees, recommended by the Committee following its scrutiny in March 2024, remains on the table on a case-by-case basis, with potential for using Members of the Standards and Ethics Committee as backups. Independent Members are recognised as an option and would be considered for Trust Committees where relevant. A discussion took place about the importance of Trust and Transparency, being able to understand the role and governance of Trusts, knowing that the rules are being abided by, and that they are being looked after in their best interests. Officers agreed to provide Committee Members with more information on this area as it has developed since they were last provided with information in March 2024. Members considered that public perception is important where Cabinet Members are making decisions and must balance serving Cardiff and their ward loyalties. Members consider there is a conflict of loyalty and heard from the Director of Legal that there is always an option to have further legal advice. External Evidence section For this section, the Chairperson welcomed representatives of the Charity Commission for England and Wales, Parliamentary Team and invited them to bring the committee up to date with the latest guidance that Local Authorities as trustees of charities should be following. Members were provided with a presentation and invited to make comments and ask questions, and the key points are summarised below: - The Charity Commission guidelines recommend appointing independent trustees to a charitable trust. - The Committee inquired whether it is common for trusts to be exclusively comprised of Cabinet members. The Charity Commission responded that while they often observe a separation of Cabinet members for trust decision-making purposes, independent members provide valuable perspectives and challenge the norms accepted by elected councillors. Therefore, the Commission considers independent members to be beneficial for making well-informed decisions. - Independent trustees can contribute technical expertise alongside local knowledge. Successful governance of trusts requires a clear distinction between the roles of making decisions as a Council and as trustees of a charitable trust. - The Charity Commission is pleased that Committee members recognised the need for increased training and awareness regarding conflicts of loyalty. - The Charity Commission found the committee's discussion on conflict management to be healthy. Conflicts must be managed in the charity's best interests. Conflicts can arise from loyalty issues and public perception regarding whether decisions benefit the Council rather than the charity. - Before making any decisions, the Council must identify potential conflicts to manage associated risks. The Charity Commission's guidelines on governance, finance, and resilience can assist with this. - It is crucial that all decision-makers understand that decisions must further the charity's interests and objectives, not the Council's. - Healthy discussion and disagreement are essential to test the benefit to the charity and build resilience before making a decision. - Transparent decision-making as trustees can prevent negative public perception. - Complaints to the Charity Commission often increase when a council is unaware of its role, typically due to public perception of conflicts of interest among decision-makers. - Best practice in handling trust matters includes consulting trust beneficiaries, often the community, to understand local priorities. - Maintaining an up-to-date Asset Register is key, and corporate memory is vital for preserving charitable trust records. - Separate and comprehensive records should be kept for trust-related decision-making. - Ensure there is a Conflicts of Interest Policy specifically for the Council's role as trustee, distinct from the Council's standard policy. - Timely submission of charity annual returns to the Commission is important to avoid official warnings, as experienced by Calderdale Metropolitan Borough Council. For this section, the Chairperson welcomed Dr Martin Price to address the Committee on the challenges surrounding governance which arise where a local authority acts as a Trustee and how local authorities can promote public trust and confidence in charity stewardship. Members were then invited to comment and asked questions, as summarised below: Appointing independent trustees through an open process ensures compliance with Charity Commission requirements for independence and enhances public defensibility. This approach minimises conflicts of interest and promotes transparency. Charities have specific objects that trustees must adhere to. Transparency is crucial in how Councils manage Trusts and handle conflicts. Independent trustees reduce the potential for conflicts of interest and increase transparency. Public defensibility is vital regarding Trust membership. Dr Martin Price provided the Committee with two best practice examples.: Best practice example of resolving a conflict of interest: • Norwegian Church, Cardiff Bay: In 2005, Cardiff Council became the Trustee of the Norwegian Church. Three years ago, the Welsh/Norwegian society campaigned for the trust to become independent from the Council. The Council had to evaluate the charity's objects, which included preserving the church, providing a space for community activities, maintaining an arts centre, and preserving links between Wales and Norway. Additionally, the Council was the leaseholder of the church, creating a potential conflict of interest. The key evaluations were whether the applicants would further the charity's objects and if the Council would be satisfied with handing over the lease to the applicants. Best practice example of improving transparency: • Anglesey Community Association: In the 1980s, Shell closed its refinery on Anglesey and endowed £20m to the people of Anglesey for community and sports organisations. Initially, the Council was made trustee, and all councillors were de facto trustees. However, 5-6 years ago public perception deemed this arrangement non-transparent. Following a review, the trust now has 12 trustees, including 6 councillors and 6 independent members appointed through an open recruitment process. This change has increased transparency. The trust is considering further increasing the number of independent members and reducing the number of councillors to avoid conflicts of interest stemming from ward interests. AGREED: that the Chairperson, on behalf of the Committee, writes to the Cabinet Member conveying the observations and recommendations of the Committee when discussing the way forward.
Decision as recorded
AGREED: that the Chairperson, on behalf of the Committee, writes to the Cabinet Member conveying the observations and recommendations of the Committee when discussing the way forward.
The Chairperson advised that Committee are receiving an update on progress in delivering the commitments of the Council’s Participation Strategy 2023-27.The Participation Strategy sets out how the Council will establish a relationship with its communities. Committee engaged in pre-decision scrutiny of the Strategy in January 2024. This item allows Committee to monitor progress in delivering the strategy. For this item, the Chairperson welcomed Councillor Julie Sangani, Cabinet Member for Public Health and Equality; Gary Jones, Head of Democratic Services; Dylan Owen, Policy & Improvement Manager, and Claire Owens, Principal Researcher. The Cabinet Member was invited to make an opening statement after which Members were provided with a presentation from Officers. The Chairperson invited questions and comments from Members. Members welcomed the signs that representation in participation activities had improved. However, they felt it was important that the success be sustained. They explored how the team would ensure repeated good returns over time. They noted the belief that the rewards were not finite, and that data would continue to be used to target underrepresented areas, building relationships with advocates and within communities through the continuing assistance of local member intelligence. Clearly, the improved arrangements for reporting back to participants were effectively closing the feedback loop and encouraging continued participation. Members highlighted the less favourable response to the 2025/26 budget consultation compared to the previous year. They noted officers' view that the spike in response levels last year was considered reflective of the sensitivity of budget proposals at that time. The Committee appreciated the equal value placed on both quantitative and qualitative engagement methods and expressed interest in understanding how the research team would showcase the impact of these new methods. They highlighted the face-to-face engagement methods mentioned in the budget consultation report, which had involved 2,500 participants. However, they requested a more comprehensive explanation on how the impact would be demonstrated in the future. Members were pleased to hear that income generated by the Cardiff Research Centre had increased this year, and higher targets for the next financial year had been set. They felt there could be scope for greater commercialisation, possibly working for other councils. They were assured that such opportunities existed, and that new technology would increase staff capacity, allowing for greater collaboration with external bodies. They recommended focusing on extending external opportunities for collaboration with other public bodies going forward. Members were particularly complimentary about the Democracy Ambassadors programme. They considered the programme to be entertaining and urged more members to get involved where they could make themselves available for a daytime programme. They noted that the programme would be extended to cover secondary schools, partnering with the Senedd, and administering drop-in sessions with homeless people. They noted the view that school governors were well placed to spread the message of this programme and recommended actively targeting them as ambassadors for their schools to get involved with the programme. Members highlighted that there was continuing work to do in targeting the 75+ age group. They acknowledged that this age group often had fixed ideas, and listening was key. They noted that the Electoral Services public engagement officer would be working creatively with small community advocacy groups to access their views. Members also noted active engagement with deaf, blind, or partially sighted groups and the need to adapt engagement by speaking to and learning from the deaf and blind communities. AGREED: that the Chairperson, on behalf of the Committee, writes to the Cabinet Member conveying the observations and recommendations of the Committee when discussing the way forward.
None.
9 April 2025 at 4.30pm.
Councillors must say when they have a personal link to something being discussed, such as a job, a property or a family member. A prejudicial interest is one strong enough that the councillor usually leaves the room and takes no part.
The minutes record no declarations of interest.
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