Approval sought to establish a new charitable Ltd company for the MPA area - ‘The Safer London Foundation’

Report: 8
Date: 5 March 2004
By: Commissioner

Summary

This report seeks MPA authority to proceed with the implementation phase of the establishment of a charity -‘The Safer London Foundation’. Authority is sought to set up a new legal entity, a ‘charity limited by guarantee’. Establishing such a charity was recommended by the Accenture report to MPA on Efficiency and Effectiveness for Income Generation, April 2002, Recommendation 21.

A. Recommendations

That the committee

1. approves the setting up of a new legal entity, ‘The Safer London Foundation’, in the form of a charity limited by guarantee. The charity’s objects, its Memorandum and Articles of Association, have been prepared by an expert in charity law and approved by the Solicitor to the Authority;
2. notes that a separate report will be submitted in due course requesting a contribution towards charity start up funding for the first two years operation until it is self sufficient;
3. nominates a maximum of two members, in priority order, to act as trustees.

B. Supporting information

The Safer London Foundation objectives

1. In the spring of 2002, MPS Management Board commissioned work to be undertaken to create a new and freestanding charity to meet the organisational needs of the MPS. A project board was established, including a solicitor experienced in charity start-up and, after receiving appropriate legal advice, a Project Initiation Document (PID) was produced seeking to establish an independent charitable company limited by guarantee. The objectives of the charity were determined as:

• Supporting youth diversion and crime reduction work;
• Establishing a research and development centre to help crystallise products and strategies for crime reduction;
• Representing police and community interests in community safety;
• Giving financial grants to police and community projects.

2. The suggested title of the charity – The Safer London Foundation – was chosen to reflect its independence from the MPA/MPS but with a clear association with the MPS mission.

3. There are many existing examples of police authorities setting up charitable trusts with the aim of channelling funds towards worthy community safety projects in their area, including Dorset, Lancashire, South Yorkshire and Bedfordshire. All have been able to apply a substantial level of added value to the crime prevention effort, drawing together resources and expertise from corporate, statutory and voluntary sector resources.

4. There are a number of national and smaller local charities operating in the area of community safety within the London region, however none is dedicated to support the MPS in utilising its vast experience. Other benefits of creating such a charity include:

• Providing a focal point for community safety activity in the area;
• Attracting a variety of partners in areas of core interest to come together, working effectively towards a common purpose;
• Channelling contributions received locally by Borough and OCU commanders via the charity back to predetermined local projects;
• Capturing and protecting product and process innovation created by the MPS before it is branded and copied by other charities and organisations;
• Establishing a body that exploits the best tax and fundraising effectiveness possible.

It is planned that the charity will be launched in 2004 as a Metropolitan Police 175th anniversary project.

Funding opportunities

5. The establishment of a new charity would create many new funding opportunities which the MPS currently is unable to pursue and make others easier to access:

A Corporate and Individual Gift Aid Membership Scheme – to attract regular funding, particularly from the business sector. Association with the charity will be highly valued and members could take up a variety of roles including full board membership, project leaders or as corporate sponsors. All could potentially hold a vote at the Annual General Meeting. For example, three levels of membership could be established:

• Founding Members - corporate, individual and organisationally based who contribute to the set up costs through finance, secondment or expertise at a high level.
• Members – corporate, individual and organisationally based who contribute a smaller amount.
• Associate Members – organisations or individuals accessing privileged charity services or supporting specific projects only.

Each group would have a range of membership benefits commensurate with their membership status

A structure and process for gift aiding membership contributions into the charity would be attractive, thereby achieving an additional 28% in the form of an Inland Revenue tax rebate. This will be net of tax for individuals and gross of tax for corporate members. This represents a massive boost to funds over and above the core contribution without any additional effort. For companies and individuals it is equally attractive as it offsets their corporation or personal tax liabilities.

Trust Funds – there are a large number of trust funds across the UK and internationally which would support charitable work in the area of criminal vulnerability and social cohesion. However, in many cases this funding is dependent on the host organisation being a charity.

European Funds – in certain cases the provision of match funding from the European Commission sources will be appropriate and desirable. Particular streams of EC work would be particularly relevant in the area of community safety. For example the 5th framework and the Socrates Fund encourage bids for various areas of inner city regeneration including safety.

The Police Property Act Fund (PPAF) – as a charity dedicated to community safety the Safer London Foundation would be eligible to apply for funds from the PPAF both to help establish it and to support project work in the London area. Any future contribution from the fund could be directed to a chosen area of activity by the MPA.

6. It is estimated that the charity’s total yearly income will exceed £1 million once fully established.

Charity Board of Trustees

7. In order to achieve charitable status and enjoy the ethical and financial attributes that come with such status, both the MPA and MPS acknowledge that it is not ethical (nor indeed permissible) to exercise total control over the charity. It is envisaged that a total board of between 10-15 trustees will be set up, representing statutory, private sector, voluntary sector and special interest groups. This will be balanced to ensure good gender and ethnic representation. The Trustees will have specific legal and ethical responsibilities under the Charity Act to ensure probity.

8. The Charity Commission considers any application with a statutory authority representation greater then 20% on the Board non-charitable. This will need clarification as the MPA and MPS may be viewed as a single entity, resulting in a restriction of no more than a joint 20% number of main board positions. It is anticipated that the MPA and MPS will be asked to provide two or three representatives between them.

9. It is envisaged that main Board meetings would be held twice yearly, however additional project and grant allocation meetings may need to be convened.

Preparatory work completed

10. This project is in a high state of readiness for implementation having:

• Completed a full Project Initiation Document (PID).
• Completed initial research into potential Trustees.
• Engaged a solicitor experienced in charity start ups
• Been approved by the project board, which includes the Deputy Clerk to the Authority.
• Been recommended in the April 2002 Accenture report to the MPA on Efficiency and Effectiveness for Income Generation (Recommendation number 21)

Timescales

11. It is estimated that a total period of about 7 months will be required to enable the charity to become operational. This involves firstly registering the limited company (4 weeks) and then gaining charity status from the charity commissioners (6 months).

C. Equality and diversity implications

1. The creation of a charitable company will enable the MPA, via an affiliated but independent body, to support a wide range of charitable activities for vulnerable groups and individuals across London, using funding streams and resources it is unable to use as a statutory body.

2. The presence of an independent, ‘third party’ charity will enable the MPA and MPS to support its various funded community safety projects without compromising its enforcement and investigative integrity.

D. Financial implications

1. Sufficient funds (£6000) are available from within an existing MPS budget to cover the cost of establishing the charitable company as a legal entity.

2. It is envisaged that the charity will need approximately two years to establish itself before it is completely self sufficient in terms of running costs. A maximum sum of £250,000 over two years is being sought to cover the costs. These costs are broken down at Appendix 1.

E. Background papers

• The following documents are available for members only:
  • Project Initiation Document December 2002. Held by Inspector James Cooke in SCD, room 235, NSY.
  • Stage I Report – Consultation and Rapid Appraisal, October 2002
  • Stage II Report – Objectives for Memorandum of Association and Potential Trustees, February 2004

F. Contact details

Report author: Inspector James Cooke, Specialist Crime Reduction Team SCD3(2), MPS.

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

Appendix 1

The Safer London Foundation Year 1-2 Projected Costs (Maximum)

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