In our latest staff blog, Village Halls Advisor, Lisa Chambers, looks at why governance matters to the county’s community buildings.
Village halls are at the heart of our communities, providing vital spaces for social, recreational, and cultural activities. However, behind the scenes of these much-loved venues are volunteers; the trustees who make up the management committee. They are tasked with keeping their facility running smoothly. The trustees are responsible for everything from booking events to maintaining the building. Trustees are crucial, but sometimes one key aspect of the role can get overlooked and that is, ensuring good governance and compliance with charity law.
Governance refers to the way a village hall is managed and run. This includes making decisions about finances, setting policies, ensuring health and safety, along with providing strategic direction for the charity. Good governance ensures that the village hall is operating efficiently, effectively, and in accordance with legal obligations. This means following charity law and fulfilling the responsibilities of being a charity trustee.
Good governance means that the trustees responsible for running the hall are acting in the best interest of the community and the charity’s objectives, which is usually to provide a community space for the inhabitants in that area.
The Charity Commission, the body that regulates charities in England and Wales, sets out clear legal requirements for charity trustees, and it is essential for anyone running a village hall to understand and follow these rules. Failure to comply with charity law can have serious consequences for the village hall charity. The Charity Commission provides lots of advice and guidance on its website for trustees to follow, but here we will take a look at some key aspects:
Know and follow the hall’s governing document – Every village hall charity will have a governing document, such as a trust deed, constitution, or memorandum of association. This document sets out the rules for how the charity is run, including its objects, how trustees are appointed, and how meetings should be conducted.
It is essential that committee members (the trustees) familiarise themselves with this document and refer to it when making decisions. If the hall isn’t being run in accordance with its governing document, this could result in a breach of charity law.
Act in the charity’s best interests -Trustees must always act in the best interests of the charity, meaning they should make decisions that benefit the hall and its users, rather than personal or external interests. This includes ensuring that the hall is financially stable, appropriately maintained and serving the needs of the community.
Any conflict of interest is an important consideration here. If a trustee stands to gain personally or professionally from a decision, they must declare the conflict and remove themselves from the discussion to ensure full transparency and fairness, this can be a common problem, especially in small communities.
Manage the hall’s finances responsibly – Financial management is one of the most important aspects of governance. A Village hall must keep accurate financial records, prepare annual accounts and file returns with the Charity Commission if their income exceeds £5,000. Trustees are responsible for ensuring that the village hall’s funds are used appropriately and efficiently, and they must guard against any misuse or mismanagement of resources.
Trustees should regularly review the charity’s financial position, plan for future needs, and ensure they have appropriate processes and policies in place for approving spending. Poor financial governance can lead to a loss of trust, funding difficulties, or even financial collapse. You should expect to see a financial report on every committee meeting agenda.
Comply with laws and regulations – Trustees must comply with a range of laws beyond charity law, including health and safety regulations, employment law (if staff are employed), and data protection rules (under the GDPR). It’s crucial to be aware of these laws and ensure that the charity is operating within them. Good examples would be that trustees must ensure that adequate insurance is in place, that trustees carry out building risk assessments including those for fire safety, and that safeguarding policies are in place.
Be accountable and transparent – Transparency is key to building trust with the community and users of the village hall. Trustees should communicate openly with the community about how the hall is being managed and how decisions are made. This should include publishing the annual reports and accounts through your AGM process and holding additional public meetings/forums or surveys where local residents can ask questions and provide feedback on their experiences of using the village hall.
It’s also important to maintain regular contact with the Charity Commission, ensuring that all necessary returns and documents are submitted on time.
Maintain the charitable purpose – The village hall’s charitable purpose (object) is outlined in its governing document and sets out the reason for its existence, this is typically to provide a space for the benefit of the community. Trustees must ensure that all decisions and activities of the hall are in line with this purpose.
Plan for the future – Good governance also means thinking about the long-term sustainability of the village hall. Trustees should consider whether the hall is meeting the needs of the community, how it could be improved, and how to secure funding for future projects. They should also plan for potential risks, such as declining hall usage, changes in legislation, or unexpected maintenance costs. By planning ahead, trustees can ensure that the village hall remains a valuable asset for future generations.
Why does governance matter?
Governance might seem like a very dry topic, but it’s the foundation to the success of any village hall. Without good governance, village halls can quickly run into problems, whether that’s financial difficulties, declining usage, or even legal problems.
Good governance ensures that:
• Public trust in the hall is maintained, encouraging local residents to use and support the facility.
• The hall is financially stable, ensuring it can continue to operate without running into debt or misusing resources.
• Legal and safety obligations are met, reducing the risk of accidents and/or legal action.
• The hall is run efficiently and effectively, with clear procedures and policies in place for managing bookings, maintaining the building, and resolving issues.
For village hall trustees, understanding and adhering to charity law is not just a legal requirement it’s a crucial aspect to ensuring the hall remains a well-run and well-loved part of the community.
If you’re a village hall trustee, it’s important to stay informed about your responsibilities under charity law and seek support when needed. Cambridgeshire ACRE’s Village Halls Advice Service offers guidance to help trustees navigate any governance challenges, if you would like to speak to someone please contact us on 01353 865048.
The Charity Commission also provides lots of support information on their website from short information videos to a quick quiz you could use at your next committee meeting to get everyone discussing best practices!