an opportunity for change exploring the trust option for museum

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  • An opportunity for change

    Exploring the trust option formuseum services

    A practical guide to the feasibility stage

  • BUnlimited is a consultancy service driven bya desire to release potential. We look at howto take the constraints off organisations andthe people in them, so that they can buildand flex their creative muscle and move fromgood to great. This may be about process andorganisational configurations but more often itis about culture and confidence. BUnlimited isabout helping clients to meet their potential.

    Lawrence Graham LLP

    Were business lawyers, advising clientsaround the world. Our base is in London but,like our clients, our reach is global.

    Were not just commercially-minded, wereentrepreneurial and results-minded. Ourapproach is to get deep inside our clientsbusinesses and the industries in which theywork. Its this depth that gives us an extraedge in tailoring the most effective legal andcommercial solutions.

    Were lawyers. Just different.

  • Foreword

    The constant challenge for local authorities is tocontinuously improve public services with limitedresources. With conflicting priorities and demandsfor local authorities, cultural services do notnecessarily get all the attention, commitmentand drive that they need.

    In 2001, the City of York Council asked meto chair an Initiation Group to investigate theoption of establishing a new charitable trustto take over the Councils key museum andarts facilities: the Yorkshire Museums andGardens, the York Art Gallery and the YorkCastle Museum, which was ultimately agreed.

    These facilities remain in Council ownershipbut the Trust has total responsibility for theirmanagement and development.

    Some elected members at the time objectedto what they perceived to be the privatisationof the services. However, a charity is not aprivate body: it is publicly accountable andlegally answerable.

    Indeed the new charitable trust, YorkMuseums Trust, has gone from strength tostrength in its now six years of operation.Relations with the Council, at both officerand councillor levels, are good. There arefresh staff, fresh energy, fresh funds fromexternal sources, and new and imaginativeprogrammes. Each side has kept to theiroriginal commitments.

    Joanna Bussell and Sandra Bicknell havenow produced this excellent report, whichsets out clearly and fully how such transferscan be set up, monitored and be successful.Their personal experience in York, I like tothink, has contributed to their thinking andwhat they have written here. I warmlyrecommend this report to any group orlocal authority who might be thinking ofsuch a change, and indeed to those ofus who have already embarked on thetransformation. We all have much to learn.

    Robin GuthrieChairYork Museum Trust

    i

  • Contact details

    Joanna BussellPartner (Local Government and Public Authorities)Lawrence Graham LLP4 More London RiversideLondon SE1 2AU

    T/ +44 20 7759 6664DX/ 1332076 London Bridge 4E/ joanna.bussell@lg-legal.com www.lg-legal.com

    Sandra Bicknell DirectorBUnlimitedT/ +44 1226 767179E/ sandrabicknell@mac.com

    Janet ThompsonHub ManagerRenaissance Yorkshire Museums SheffieldLeader HouseSurrey StreetSheffield S1 2LH

    T/ +44 114 278 2672E/ janet.thompson@museums-sheffield.org.ukwww.yorkshirehub.org.uk

  • Contents

    Page

    Foreword i

    1. Introduction 1

    2. Your present position and aspirations 7

    3. What are your options? 12

    4. Options assessment is a trust the right option? 19

    5. Next stages 25

    6. Communicating possible change 27

    7. Reflections from existing trusts 30

    8. Concluding remarks 32

    Appendices

    A The NPDO options 33

    B Comparison between alternative NPDO options 38

    C Risk matrix 40

    D Key legal tasks for a museum transfer 42

    E Schedule of legal documents 44

    F Trustee recruitment 45

    G Person specification for trustees 46

    H Draft advert for prospective trustees 47

    I Model object clause 48

    J Local authority powers 49

    K Background to VAT position of NPDO 51

    L NNDR briefing 54

    M Staffing issues 56

    N Definitions 57

  • 1

    1. Introduction

    A practical guide

    This is a practical guide targeted at localauthority officers who have responsibilityfor, or who are involved in, a local authoritymuseum service and who are consideringthe transfer of services from the localauthority to a Trust.

    It is intended to be a practical documentto help you to think about what might beinvolved in transferring a local authoritymuseum service to a Trust. The criticalfocus of this guide is the first stage of thetransfer process the feasibility stage.

    The transfer of services to a Trust is a majororganisational change. It is imperative,therefore, to the success of an initiative ofthis nature, that you undertake a thorough,objective and professional approach to thefeasibility stage of the transfer process.

    The aim of this guide therefore, is to highlightthe key issues you need to consider whenexploring the Trust option. We have not givenyou all the answers, as your answers will bespecific to you and they will depend uponyour own circumstances. We have focusedinstead on the issues and the processinvolved. The contents of this guide does notnecessarily offer you a blueprint but shouldoffer enough detail, with examples, to helpyou with your own planning.

    You will see that throughout this guide westress the importance of communication.This is because of the very simple fact thathow you communicate possible changes willmake or break the possibility of initiatingthose changes.

    The experience offered within this documentcomes from two main sources: legal teamswho have extensive experience of transferringlocal authority services to Trusts and peoplewho have headed local authority museumservices both pre- and post-transfer.

    Other sources of information

    This practical guide to the feasibility stage ofa transfer of museum services to a Trust isintended to compliment other sources ofinformation published in recent years lookingat the advantages and disadvantages of theTrust Option for museum services and thekey legal, financial and operational issuesinvolved. Most significantly key sources ofbackground information on the Trust Optionfor museum services includes the MLAspublication Moving to Museum Trusts:Learning From Experience (2006) in(the MLAs Report) and the 7th Edition ofLawrence Graham LLPs publication Culturein Trust (2007).

    This guide focuses in particular on thefeasibility stage of the transfer process, thatis determining whether the Trust Option is theright option for your museum service and thecritical issues to be addressed during theimplementation stage to ensure the transferis a long term success for all parties involved.

    Transferring a service to a Trust will not initself transform the service. It is essential,therefore, that the feasibility stage identifiesthe critical success factors and mostimportantly resources are put in place todeliver the required change programme.

    Quick wins are important. However, the realmeasure of success must be sustainabilityand continuous service improvements.

    This practical guide will help all thoseinvolved in the change programme toidentify and put in place the platform fora successful transfer of museum services.

    The Trust Option

    The Trust Option referred to in this guide isa generic term for arranging for the deliveryof the services by a non profit distributingorganisation (NPDO).

  • 2

    The Trust Option would involve therefore:

    n establishing a new NPDO (or identifying asuitable existing NPDO);

    n transferring the existing services includingstaff to the NPDO; and

    n entering into new partnership arrangementswith the NPDO for the delivery of museumservices.

    NPDOs take a number of different legalforms including a:

    n unincorporated charitable Trust;

    n company limited by guarantee (charitableor non-charitable);

    n industrial and provident society (charitableor non-charitable);

    n charitable incorporated organisation; and

    n community interest company.

    Whatever its legal form the key distinguishingfeatures of an NPDO is that its profits cannotbe distributed (eg to shareholders) but mustbe reinvested back into the organisation tofurther its objectives.

    This is the fundamental difference between aprivate sector share company and an NPDO.It means that all of the profits generated bythe organisation are continually reinvested toimprove the services provided.

    We set out the advantages of the Trustoption in Appendix A of this guide. However,it must be emphasised that these potentialadvantages do not arise automatically fromthe legal status or the structure of theorganisation alone.

    Success will depend on the leadership,commitment and culture of the neworganisation and importantly in this context,the willingness of the staff involved toembrace the organisational change andopportunities the NPDO presents.

    An overall process model

    We recommend a four stage process. Thisis summarised as the flow chart overleaf(Table 1).

    The chart is intended to model the overallprocess of transferring a local authoritymuseum service to a Trust. This is followedby short descriptions of each stage. Asstated above, the main narrative of this guideconcentrates on the first stage of this overallprocess: the feasibility stage.

    We have focused primarily on the feasibilitystage of the process because carefulconsideration of issues during this stage isessential to establishing a sound basis forany further development of a Trust option.

  • 3

    Table 1

    Key stages for a transfer of museum services to a trust

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