NEW DEAL FOR COMMUNITIES
Successor Bodies – Criteria For Approval
Introduction
New Deal for Communities (NDC) is a key programme in the Government’s strategy to tackle multiple deprivation in the most deprived neighbourhoods in the country, giving some of the poorest communities the resources to tackle their problems in an intensive and co-ordinated way. 17 pathfinder partnerships were announced in 1998, followed by a second round of 22 partnerships in 1999. Approximately £2bn has been committed to these 39 partnerships. All of the NDC partnerships are tackling five key themes of: poor job prospects; high levels of crime; educational under-achievement; poor health; and problems with housing and the physical environment.
Most of the partnerships NDC funding will come to an end in 2010/2011 and accordingly the NDCs are looking at succession plans to be able to continue with the regeneration of the NDC areas. To this end there are a number of considerations that have to be made but all the NDCs will require the approval of the Communities and Local Government (CLG) to their proposed successor body before they can continue. The CLG have issued a number of Programme Notes as guidance for this process and this article looks at, in brief, the criteria for the approval of the CLG.
Criteria
There are 8 criteria for approval set out in the CLG guidance. It is important to consider all of these criteria to obtain CLG approval of the successor body.
Criterion 1 - The NDC will need to demonstrate an appropriate contribution to delivering the local priorities as set out in the Local Area Agreements and other strategies such as the sustainable communities plan. This should be linked to Local Strategic Partnerships (LSPs) plans and therefore the NDC should work closely with the LSPs in formulating their business plan for approval by the CLG.
Criterion 2 - The NDC needs to ensure that the community itself is still significantly involved in the future work of the NDC. One of the ways to ensure this is to continue to have resident trustees/directors but there are other ways such as involvement in the area and the development and support of community leaders.
Criterion 3 – There should be agreement between the NDC, the LSPs and the Local Authority as to the split of responsibilities for activities going forward. It is therefore obvious that close relationships with these bodies at this stage, to agree and resolve any issues, will help the succession process.
Criterion 4 – The NDCs assets must be safeguarded in the long-term. It goes without saying that the NDCs assets were purchased with public money and therefore the CLG must ensure that the assets are safeguarded. In particular, some NDCs may wish to have the clawback restrictions removed from assets and this is more likely to be achieved if the CLG is satisfied that the successor body has sufficient controls over the use of assets to ensure that they are still safeguarded. For example, if a successor body registered as a charity then the assets are protected by the Charity Commission and this is therefore an acceptable successor body to the CLG. Registration as a charity can however, pose its own difficulties and so this option would need to be considered in some detail.
Criterion 5 – The successor body must have governance arrangements which support the objectives of the succession plans. The NDCs governance (be it articles of association or other governing documents) will need to show that its governance is robust and its “Objects” are appropriate. The CLG will want to see that the Board has a mix of skills against identified skills needed and contain details of selection and appointment of board members. Many NDCs will find that they will want to change their existing governance to deal with a wider purpose and reach but this will require careful drafting to obtain the approval of the CLG.
Criterion 6 – Each NDC has to properly identify the risks to its succession strategy and ensure that these are being actively managed. If the successor body is more than one entity then a risk analysis will have to be undertaken on each entity within the organisation.
Criterion 7 – The strategy for the successor body has to be agreed between the NDC and the Local Authority and it is therefore prudent at an early stage to discuss the succession plans with the Local Authority to obtain their advice as well as buy-in. In addition, the CLG requires support from other stakeholders and partners. The NDC should liaise with all relevant organisations at an early stage to prevent delays in getting approval as deadlines for succession plans to be approved are tight.
Criterion 8 – Finally, the successor body has to be financially independent in the long term and a detailed business plan is required.
If you require any further information about the above and other legal issues affecting NDCs please contact Helen Robinson at helenrobinson@cumberlandellis.com