Lowther Annual Report

This article builds on the five previous five articles we've recently published on this matter.

Under the pretext of legal privilege, Fylde's Conservative group and their officers drew a veil of secrecy to hide what was going on, but we lifted the veil and have now uncovered most of the story for our readers.

In essence, a court case is pending. The Trustees of Lowther Gardens sought to terminate a business lease that had been granted on the Pavilion cafe, and the cafe proprietor is seeking the support and protection of the court in renewing his lease, as is his right.

Fylde Conservative councillors recently voted to pay the costs of this court case - estimated to be up to £175,000.

This is to be paid to the Trustees of Lowther Gardens Trust from the taxes we pay.

Having decided to trigger termination of the lease, the Trust found itself at the opposite end of the legal action which might yet cost it £175,000.

We've explained all of this in our previous articles (see below), but at the end of our last article, we had just four outstanding questions:

1. Why Fylde Conservative group agreed to pay the legal costs for the Trustees
2. Whether an invalid copy of the Trust's Governing document that purported to give the Trust powers to extend the Pavilion, (or to add new buildings) existed.
3. If it did exist, whether it had been fraudulently, or otherwise improperly used to gain some advantage, and
4. Whether Fylde Council knew it was invalid, or whether they had been hoodwinked into believing it was valid, or even, whether they had been complicit in creating or supporting what could be seen as a deceptive re-development plan based on an invalid document.

From new information recently uncovered, we believe we now understand why Fylde agreed to pay the legal costs of the Trustees.

We also know that an invalid Governing document does exist.

The background and details for both of these statements are set out in the article below. But we have yet to discover the answers to questions 3 and 4.

This article is in three parts.

• A short introduction, followed by a long report about what happened at the January 2019 Tourism and Leisure Committee.
• How the Trustees leveraged Fylde Council to pay potential legal costs they are facing.
• The result of enquiries to the Charity Commission.

SYNOPSIS
We have previously looked at this matter - first in: Snippets October 2018: Lowther Gardens Trust , and in Lowther Gardens. Trust? and Farce, Fiasco or Tragedy? and most recently in Lowther Goes Legal.

This new article begins with a Brief Introduction and a short primer on How the Trust Works, before starting our Report of the recent Tourism and Leisure Committee, where we look first at the agenda item comprising the Officers' and the Trustee's Written Reports, followed by a brief note of how it was Presented at the Committee.

Of greater interest however, was the Questions session where Cllr Elaine Silverwood led the charge for transparency and accountability. The questions she asked  illustrated the lack of sufficient information provided to councillors.

Picking up her theme, we next give Our Own Comment on what we think is going wrong in the division of responsibilities between councillors and officers, before Cllr Silverwood Continued her questions on behalf of another Councillor who could not attend. This sparked an explosive debate when Cllr Silverwood started her final question. She let slip that the Trustees had all threatened to resign if Fylde did not pick up the costs of their legal case. Cllr Ashton called for the meeting to go into closed session.

Next, Cllr Jan Barker had questions of her own about the lack of information in the Trust's Annual Report, before Cllr Tim Ashton presented the opposite view very robustly and was in our view extremely disrespectful to both Cllr Silverwood and Cllr Barker. We have the verbatim quotes and readers will make up their own minds.

We conclude the first part of the article with Our Own View of what took place at this stormy meeting and why we believe Cllr Silverwood was exactly right to do what she did.

Next we look at Why Fylde was Coerced into paying the Trusts' Legal Costs,  and at the likely basis and pros and cons of their respective cases: first the Redevelopment Option, then the Self-Use Option before we offer an Analysis of the background and our take on why (at least at this stage) we think the Trustees succeeded in getting Fylde Council to pay their potential legal costs.

In the third main section of our article, we look again at the Trust's Governing Document and how that DOES prevent the Trust's proposed redevelopment of the Pavilion. We know this because we also break news from the Charity Commission who have confirmed that an 'invalid' Governing Document does exist. This invalid version purports to permit extension or additional buildings in the Gardens but the real one actually prohibits it. We also look at some of the implications of this revelation.

Finally, we highlight the last couple of things that are not yet known, whether the invalid Governing Document might have been used fraudulently, when and how Fylde found out about it, and whether they knew it was invalid or not. We also wonder what implications all of this will have for the pending court case.

  INTRODUCTION

In a timing co-incidence that must have been about as unwelcome as Theresa May's requirement to report her Brexit proposals to Parliament, it was also time for the Trustees of Lowther Gardens to present their Annual Report to Fylde's Tourism and Leisure Committee.

It's not what we would call an impressive document. Just two simplistic pages that several teenagers we know could have done better job with.

We suspect that's because the Trustees didn't want to leave any 'trailing coat tails' - they didn't want to put anything in their Annual Report that the members of the Committee could use to question them further.

Clearly, that wasn't going to stop some members of the Committee and other Councillors though.

In the Committee meeting, matters became very heated at one point, and we heard some very unpleasant - and what we regarded as inappropriate - innuendos and comments from Cllr Tim Ashton.

But first we need to provide readers with a quick primer about the Trust.

 HOW DOES THE TRUST WORK?

Sadly, the officer report for this item does not explain the background to the Trust.

So because this topic looks like it is turning into a 'running sore' for a while longer, we thought our readers might appreciate our take on how it all works.

The formal name of the Trust is "Lowther Gardens Lytham"

It is a charity registered with the Charity Commission (No. 1117054).

It was formalised to this status when Fylde planned to re-develop the Pavilion to include a Civic Suite. Objections arose, and it became clear that the gardens had not been gifted to the Council, but rather, had been gifted to local people.

This situation required the Gardens to be registered with the Charity Commission, and their Title Deeds to be lodged with 'The Official Custodian' (who is part of the Charity Commission).

Registration also imposes constraints on what may and may not be done - usually via something called a 'Governing Document'.

The only Trustee named in the Governing Document is Fylde Borough Council. (This makes Fylde a sort of 'Trustee of last resort'). But soon after the Trust's inception, Fylde appointed several other Trustees.

From that time onward, the Trustees selected and appointed their own trustees in accordance with their Governing Document.

The Trustees assumed responsibility for the management - initially of Lowther Pavilion, but now also of the Lowther Gardens, its car park, and other ancillary matters within the boundary walls.

The Trust is funded by fees, charges, and other forms of income such as grants and donations they can generate themselves. However, the Trust's main funding presently comes from grants and subsidies paid to them by Fylde Council on our behalf.

To regulate and relate the performance of the Trustees in return for the subsidy they receive, the Council uses a something called a 'Service Level Agreement.'

This sets out what the Trustees must do in return for the subsidy they get, and how their performance in doing so will be measured.

It also sets out how service or other performance failures will be dealt with.

The Trustees themselves now have overall responsibility for almost everything within the boundary walls of Lowther gardens, excepting the public lavatories (which operate under a separate commercial contract let directly by Fylde Council and are not part of the Service Level Agreement)

The Trustees of Lowther Gardens Trust are supposed to act as a sort of 'board of directors' taking decisions, and they devolve the practical day to day work of the Pavilion and gardens to a number of separate bodies including:

A private limited company called "Lowther Gardens (Lytham) Management Limited" which is a commercial operation registered at Companies House. Some or all of the Trustees of the Lowther Gardens Trust are also Directors of the operating company. This mainly deals with the Pavilion operations.

The Pavilion cafe is commercially leased to an independent private business, and

The Trustees engage the Parks Department and other parts of Fylde Council to look after the gardens and grounds etc.

The situation regarding the Cafe is currently a bone of contention which we have reported previously (and linked to in the Synopsis above).

 THE RECENT TOURISM AND LEISURE COMMITTEE

The T&L Committee recently received and debated a written Annual Report from the Trustees for the year April 2017 to March 2018. The Chairman of the Trustees attended the Committee meeting to present the report and answer questions.

 THE 2017-18 TRUSTEE'S REPORT

To be honest, we were not impressed with this Annual Report. Readers can follow this link to download it in full and see for themselves.

We also thought the Fylde officer's covering report for this item was exceptionally poor as well. We're tempted to go further to say it was a disgrace.

Fylde's officers completely failed to analyse the Trustee's Annual Report to produce an explanation and commentary on its content.

We say they should have done this to explain and advise elected councillors (to whom they are responsible) how well or how badly the claims made by the Trustees in their Annual Report had met the requirements of the Council's Service Level Agreement.

The information from officers was necessary because the Trustees' performance against the Service Level Agreement is how the Committee decides whether the money they vote to the Trustees each year is good value or not, and whether anything needs to change.

Instead, the officers just republished the Annual Report the Trust had provided for the period and simply said:

"The Council currently has a service level agreement with the operating company of Lowther Gardens Trust, Lowther Gardens (Lytham) Management Ltd, to provide services at Lowther Pavilion. As part of this agreement, the Trust will provide a report to the Councils Tourism and Leisure Committee at the conclusion of the financial year, summarising performance over the previous year.

This report is included within the Information Note Lowther Annual Performance.

Representatives from Lowther Gardens Trust will be attending the committee to present the key points arising from the report."

In effect this is saying - We've attached the Trustee's report as it came, make of it what you will.

Frankly we regard that approach as both an insult to the Committee, and the dereliction of an officer's duty.

We contrast this with a typical report to Fylde's Planning Committee where officers (quite properly) provide a host of detail about each planning application and the extent to which it does, or does not, comply with the policies of the Council, other statutory agencies, and other consultees.

In comparative terms, what happened at the Tourism and Leisure Committee was equivalent to letting the Planning Committee have the applicant's planning application form and saying 'here it is, you decide whether to approve it or not, after you've heard the applicants version of his proposals'

Patently, it is a nonsense.

 THE REPORT IS PRESENTED AT COMMITTEE

The Chairman of the Trustees presented the Annual Report in a polite and personable manner, inviting councillors to agree what a good job the Trust had done.

He gave a simplified background to the formation of the Trust and said the cost to the council for running the Pavilion part of the Gardens was significantly less now than before the trust was formed, and he said there was now more community support.

He then picked out some of the more positive aspects of the physical improvements that were set out in his written report.

He noted that when the Trust took over there were three members of full time staff running the building, today there were nineteen who were either full or part time.

He also spoke positively of revenue generating schemes from the Trust, like the 'Bench Scheme' and the 'Sponsor a Tree' Scheme, and was especially proud of the value of volunteer work which he said was worth over £50,000 in the 'front of house' and technical aspects of the Theatre's operations.

After covering various other aspects he asked for questions.

 QUESTIONS TO THE TRUST

The Chairman called Cllr Elaine Silverwood to speak. She indicated she had several questions.

 Cllr Elaine Silverwood

She began by saying that on reading the report, she thought it was very weak, adding -

"... I don't think it has any, or enough, substance or body to it. Mr Lince has just put a little bit more flesh on the bones, but there are a number of questions I'd like to take the opportunity of asking whilst you're here please."

The first was about the sums spent on repairs and renewals and she asked what the Council's subsidy had been spent on - had it been spent on the day to day operations, repair and maintenance, staff wages or what.

Mr Lince said it was to subsidise the community groups who use the building and pay about half of what the commercial rates and charges were.

She then asked about the legal costs and where they had come from, asking if they were from donations.

Mr Lince said not. He went on to say there was a levy on ticket sales which was toward the development of the building, and he appeared to say that's where legal costs, if any, would come from.

She moved on to the Trust's turnover and said she made it to be about £1 million, which Mr Lince confirmed. Cllr Silverwood asked why it was that, with that level of income and donations and subsidy, the Trust was not turning a profit at this stage.

Mr Lince replied to say they were a charity and therefore couldn't make a profit but it was used for consequential investment in repairing and improving the fabric of the building.

Attempting to move deeper into financial matters, Cllr Silverwood asked about accounts the Trust submitted to the Charity Commission and she thought they did not have to be audited accounts, but she thought the Council's Service Level Agreement did require audited accounts to be produced - she thought quarterly - and she asked if those accounts came to the Council.

Mr Lince said audited accounts would not be done quarterly, but at the quarterly meeting with officers a set of accounts is given in on the last quarter's trading. He said that had been the case since 2011, adding:

"The accounts are being audited at the moment, OK? But because of the way in which the.... we had..... we took the Council's auditor on, who audited the accounts prior to us taking over in 2011. We changed auditors two years ago because we had a concern that they wasn't being, erm, reported at the... the Charity Commission accounts were not being reported quite right. We brought in a new auditor who's revised the whole system. There was nothing proven that had been done wrong, it was just the way of reporting. And the accounts are being audited at the moment and will be available as they always have been. You can go through Companies House, through the Charities Commission and get them."

Cllr Silverwood persisted and asked if the Council - as in the Councillors (as opposed to the officers) received the accounts that the Service Level Agreement (SLA) said the Council would receive, and whether those accounts should be audited or not.

Mr Lince appeared to say yes they did.

Cllr Silverwood said she accepted she was new to this Committee and perhaps she had not noticed them before, but she didn't seem to recall seeing them.

Then one of the Council's Senior officers said

"No, they're not given to members. They're received by officers and assessed according to the SLA, and it's an action that officers deliver on behalf of members"

Cllr Silverwood sought an assurance from the officer that they were fully audited.

The officer said they accorded with the Service Level Agreement.

Cllr Silverwood pressed about the auditing again, an another officer explained further, saying:

"There's a quarterly performance meeting between officers and the Trust, and one agenda item is finance, and we look at the quarterly accounts, well, the finance officer looks at the quarterly accounts, and those would be unaudited at the time, as Tim said, because quarterly accounts would not be audited.

I can't say for certain, but I'm pretty sure that Finance do look at them at the end of the year - at the audited accounts for the previous year, and that's monitored every three months to make sure that the Trust is sustainable, and it's moving forward in the right direction, and there's obviously no major risk on the horizon financially.

Cllr Silverwood said she thought that when Councillors received an annual Report, it should have that sort of information in it, rather than the two page report they had been given.

 OUR COMMENT SO FAR

Readers might think we've made rather a meal of this interchange, and we have, but there is an important point to be made about the division of responsibility between officers and councillors.

Before we look at that aspect though, it is instructive to consider what the officer just said.

From what he said, it appeared to us that the quarterly accounts were being considered from the perspective of financial solvency and risk, not in terms of value for money, and not to relate the Trust's performance to the subsidy being paid to the Trust by the Committee.

We will go further. We will say it's not even the role of officers to judge value for money in this regard. It is exactly the role of elected councillors.

When the initial arrangements to set the relationship between the Trust and the Council were being put in place, the Cabinet of the day (in 2011) said it would provide the Trust with a subsidy of £30,000 conditional upon a variety of matters. These included the negotiation of a Service Level Agreement which would place certain requirements on the Trust

The Cabinet mandated the (then) Policy Development Scrutiny Committee to look at the detail of what should go into the Service Level Agreement, and then report to Cabinet.

The Scrutiny Committee established a Working Party to get to grips with the details. Over several months, and in conjunction with representatives of the Trust a draft Service Level Agreement was debated and produced. It was agreed.....

"That a Service Level Agreement would be agreed that would enable financial performance and achievement against targets to be regularly evaluated"

"That the Trust should work towards a separation of duties i.e. that the Trustees themselves should not micro-manage the events at the Pavilion"

"That clarity should be provided as to the separation of interests of the Trust and the Charity operating arm, and the relationship between them"

"A Service Level Agreement for the maintenance of the Gardens to be agreed, and that the Trust should seek to appoint a trustee with a particular interest in the Gardens."

The Working Group told their parent Scrutiny Committee.....

"During the course of the meetings, these issues were either clarified, resolved, or it was agreed that they could be monitored by regular structured reports, as agreed within the SLA."

"After detailed discussion, over more than one meeting, members agreed that the provision of performance and financial information from the Trust in accordance with their SLA could provide council with adequate checks and balances to be able to monitor those areas of interest which had been discussed at the meetings."

"In response to members' questions about the separation of responsibilities between the Trust and the charity operating arm, he [Mr Lince] acknowledged that in the past the Trust had perhaps been too much "hands on" in terms of the running of the theatre, but with the appointment of Ms Leclercq was now able to distance itself as was proper, and leave that aspect of service delivery to officers."

"The user groups had hoped to have a representative on the Trust Board and members supported that aspiration. They were advised that any person appointed as a Trustee could not act as a representative of any group, but must at all times work in the interests of the Trust as a whole. This did not mean that a person with an interest and background in amateur productions could not be a Trustee and bring such expertise to the Trust - only that he or she could not actively represent the interests of those groups. Ultimately, it is solely within the power of the Trust to decide upon and appoint its Trustees, and this matter was left for them to decide although members made their preference clear."

"For that reason, members agreed that regular performance and budgetary updates to council as provided for in the Service Level Agreement would allow for a level of checks which would satisfy the working group, and therefore commends its recommendations to the Policy Development Scrutiny Committee for approval and subsequent consideration by Cabinet."

So it is clear that the principles on which the Service Level Agreement was created envisaged regular performance and budgetary updates being provided first to Fylde's Scrutiny Committee who would satisfy themselves with its adequacy, before forwarding them with a recommendation to the decision-taking Cabinet.

The crucial point here is that it was elected Councillors who were to be the arbiters of the regular performance reports and financial statements, not the Council's officers.

Fylde's Cabinet supported the Scrutiny Committee's report and added more detail to the updated SLA they approved. It was then delegated to the Leader of the Council at that time (Cllr Susan Fazackerley) to finalise the fine detail of the Service Level Agreement. Various changes were made in what became the first 'final version' of the Service Level Agreement.

However, since its inception, the requirement for regular performance and budgetary updates to be provided to Councillors has been usurped by Fylde's officers - as explained to Cllr Silverwood at the meeting.

We're clear it is right for officers to RECEIVE the performance and budgetary updates on behalf of the Council, and to consider and analyse them.

But it is not right that the process should end at that point.

The officers should produce quarterly reports to the Tourism and Leisure Committee to accompany the performance and financial updates together with their own commentary on how well (or otherwise) the data meets the requirement of the Service Level Agreement.

We will go further and say the officer report should also contain the information for the previous two years as well as the one being reported, in order for trends to be spotted.

We say this should be done not least because it is explicitly the role of the Committee to relate the Trust's performance to money that only the Committee and full Council can approve by way of subsidy payment to the Trust, and the extent to which this payment represents value for money for taxpayers.

Furthermore, and quite apart from the financial aspect, having had members set the requirements of the initial Service Level Agreement, it must be right - as Cllr Silverwood tried to insist at the meeting - that councillors - not officers - also determine the adequacy of the matters measured by the Agreement that elected members had devised, and to do that, they need to be properly informed about the Trust's performance.

If quarterly reports to the Committee had been taking place (as we believe they should have been), then the termination of the cafe tenancy that the Trust embarked upon might have been picked up and dealt with before matters went to the Courts, and before Fylde has had to put £175,000 of our tax aside to pay the legal costs if the case goes against the Trust.

 CLLR SILVERWOOD CONTINUED.....

She said that Cllr Oades was unable to attend that night, but she had sent the officers a number of questions. She had been given answers to some of them, but was told the majority of the answers she sought should be asked at the meeting itself, so Cllr Silverwood hoped to present them on Cllr Oades' behalf.

She said that at the meeting in December, councillors had been told that the Service Level Agreement was weak and the trustees had got themselves in a mess, and the reason he had come cap-in-hand for £175,000. So she said this was an appropriate time to look having at checks and balances in place.

She wanted to see greater reporting to the Committee and said:

"I've talked about accounts. I also think that members should see a breakdown of complaints received from service users, and how they've been resolved. I also think it should be year on year as a comparison, and I think it should be broken down into categories such as booking and pricing and parking....."

Mr Lince said he believed the car parking pricing was sustainable, he said when the council was running it the income was around £3,500 a year after paying service costs for the machine or whatever, before adding that the current year income is estimated to be around £21,000 or £22,000 and he thought that was an incredible improvement.

We're pretty much sure that the comparison he made was not directly relevant. When the Council ran Lowther Gardens themselves, it was the practice to treat the costs of many of the administrative staff as an overhead over deliverable services. (The less polite and more leftward leaning of council employees would describe this charge as being 'on the backs of the workers').

What this meant was that when costing a workman's time, his hourly chargeout rate included his actual pay, and direct ancillary costs like transport, and employers National Insurance, and any consumables he required.

But to this was then added an amalgamated average of what were deemed to be 'Central' costs derived from many other departments.

In times with which we were more familiar, this would typically add another 117% to 120% to the workman's 'real' (direct) costs.

And when you had staff travelling round multiple car parks to check times on tickets in car windows, and to empty machine cash boxes at least daily (and more frequently in summer), direct costs alone were significant. So when you added the overheads 'charged' against that service, they would more than double.

When the trust was formed, the Trustees were (properly) exempted from having to pay these 'overhead' payments (which would have to have been re-distributed over the remaining 'workers' directly employed by the Council)

As usual, we've digressed......

Back to the Tourism and Leisure Meeting..... On complaints Mr Lince said:

"At every quarterly meeting there is a section of the meeting that we go through all the complaints and comments that have come in, and we report on them and we're very honest about what's going on.

If you would like to know an example of what has come in, we've had this year, a lot of discussion over disability access to the venue.

And it was raised by a lady is in a wheelchair herself, and her husband, and they were talking about carers.

And most theatres, now, don't provide free carer spaces. It's just become one of those things that became very difficult to actually work out who was disabled and who wasn't.

And that comes into account with dementia and with mental illness when mental illness is now considered in exactly the same light as somebody who has a physical illness.

And therefore it's not up to our staff to challenge somebody at the box office and say that they don't believe this person has mental illness and therefore can't have a carer space with that.

So a decision was made that carer..., we would..., not provide carer spaces free in the auditorium.

But obviously, people have come in and they've made comments about that, and they've talked to us about it, and we have revised how that policy is now run, and we react to every single complaint that comes in, and we deal with it.

If any councillor could show me a complaint or comment that has come in that hasn't been dealt with, and hasn't been answered, there is a catalogue, and whoever deals with it, whether its on the box office, or whether it is somebody like the administrator of the theatre, they keep a record of every conversation that has been had, and every resolution that has been had to the complaint or comment that has come in.

Over the years, the number of complaints that has come in has reduced substantially, and the majority of comment that comes in now is what a wonderful place Lowther has become for them to go to.

You only have to go to Trip Adviser, you only have to look at Facebook and you can see people now are very vociferous, and it's easier there to put a complaint on those things, as I'm sure the Council are well aware, as anything else, and if you go and scroll down, you will see that's not the situation.

I'm not saying that we're perfect, at all, and I would love to be in a zero complaint situation but, in general, we are running a very, very tight ship and we are reporting them very accurately with our SLA meetings with the Council."

Three points struck us about what he said.

• Firstly whilst his example of an individual complaints was indeed relevant, what the Councillors need to know in respect of the Trust's performance is overall numbers, types, and trends of complaints.
• Second, the ignorance amongst elected members about how well or how badly the Trust is performing, is entirely created by the lack of even adequate, let alone proper, reporting by officers.
• Thirdly if, as Mr Lince explained, the trust is doing as well as he paints, then in his shoes we would want to broadcast that success far and wide, and we would *want* to include the year on year statistics in the annual report we provided to elected councillors - to illustrate how well we were doing.

Cllr Silverwood continued saying....

"Really, the reason I'm asking these questions and asking for more depth and body is; ultimately, it is our responsibility as councillors and as the Council.

This is public money we're talking about, and I'm sure if members of the public were here and given the opportunity of asking the questions, when there's a lot of money being spent, it's appropriate for us to ask them."

She said she had one final question.....

"In the report that came to Council in December, when a decision was being made on the request that had been made by the Trustees for the money, it was said that if you were unsuccessful in securing that money, then you, and the rest of the Trustees would resign, Now, obviously..."

At this point she was interrupted by Lytham Conservative Cllr Tim Ashton who said....

"Chairman, I think we should be going into Committee on this. We shouldn't be talking about this at this meeting. We should exclude the public if we're going to talk about this Chairman. The public should be excluded because if we talk about this....."

The Chairman, Cllr Cheryl Little, agreed and said they couldn't discuss it.

She told Cllr Silverwood:

"Now you're on this committee Councillor, we could, then if you want to ask questions and micro-manage the Lowther Trust, then I'm happy to be able to facilitate that, but that particular item, that particular issue that you're bringing up, we can't discuss....."

Cllr Silverwood said accepted the Chairman's ruling and said she apologised if she had brought it up incorrectly in a public forum.

She sought an assurance that if she emailed the specific detail of certain questions to the Chairman and officers they would be dealt with, because when Cllr Oades had sent questions in, she wasn't given the answers. Rather Cllr Oades had been advised by an officer that because she didn't sit on this committee, and because she was unable to attend in person she had to direct those questions to the Chairman at the meeting.

We'll return to this revelation later in the article, but first, we think there's something significantly wrong here.

Cllr Silverwood probably was incorrect in raising a matter from a previous exempt item in the way she did, and she would have been better giving an outline of the nature of what she wanted to ask about first - so the Committee itself could decide whether or not it was covered by the exemption that justified the previous meeting being held 'in camera'

That justification existed only because the previous report contained.....

"Information relating to the financial or business affairs of any particular person (including the authority holding that information) and information in respect of which a claim to legal professional privilege could be maintained in legal proceedings."

Now, from what Cllr Silverwood had said up to that point, we couldn't see the prelude to her question would have fallen foul of that exemption.

It might, of course, if she had gone on to discuss or ask questions about such matters, and that would have been improper. But to our mind, she had not got far enough into what she wanted to ask for the Committee to arrive at a decision as to whether it could have been justifiably exempt.

She might simply have wanted to know whether it was, say, a unanimous decision of all the Trustees to resign, or she might have wanted to know if it was why the Council's Trustee at the time, (Cllr Brenda Blackshaw) had chosen to resign soon afterwards, or a number of other matters about the probity of the Trust's conduct, which would not have met the test for exemption, but which would have been in the public interest.

Cllr Ashton's apparent desperation to prevent any aspect of the matter from the Council's (in camera) December meeting from being discussed by the committee was, in our view, premature, but it does highlight the matter of the level of detail that's necessary to justify making an item exempt.

We've said this before, but if there is a controversial matter that members or officers want to debate, and which does not meet the test for exemption, it is not unheard of for something to be inserted into the report - say about someone's salary - which then becomes a justification for making the report exempt from public scrutiny.

We're pretty sure that's not what the law intended, but it has occasionally been used to cloak an item in secrecy that would otherwise not justify exemption.

And before the writs fly in, we make it clear that we're NOT saying that's what happened here regarding the exemption of the previous Lowther Items that were exempted.

What we are saying is that sometimes it can be really difficult to find the right balance between the requirement for transparency and the desire for secrecy.

 Cllr Jan Barker

Thanked Mr Lince for bringing his report and for his enthusiasm. She said she had been looking forward to seeing how well the Trust had done, but his report was lacking in the type if information expected in an Annual Report, and she gave examples of what she thought should have been included.

She said she would have liked to know how well the 'Sponsor a Tree' scheme was doing, and the same for the 'Bench' scheme, and although he had touched on this orally, they were not in the Annual Report, so although it is a public document, anyone outside the Council meeting would not be aware of how well these schemes were doing. She gave other examples, before saying: :

"The Council supports it financially through an annual subsidy which is not our money, but everybody's money obviously, it's the public purse. It's also stated that Lowther is the main cultural and community offer for Fylde. So it's not unnatural to want to see to what extent, over the past year, the community has benefited from the subsidy."

She went on to question where that information should be, and suggested it ought to be in the Annual Report.

She also thought there was a lack of detail in the session usage as well, and she suggested that an expanded report could be submitted to the next Committee meeting.

 Cllr Tim Ashton

Took a different perspective. He said

"I would just like to apologise to Mr Lince for the negative comments we've received from the two councillors behind me. From my understanding they're reading a different report than I am. Because the report I read is extremely good. And I'm extremely pleased he has given that report today. .

Sometimes we get far too much information as councillors, and the concise accurate report you've given us tonight is ideal for me and my colleagues.

Next thing, we'll be wanting to know how many loo rolls you've bought in the loos if councillors had their way behind me. I'm not..." ;

At this point he was interrupted by Cllr Mrs Barker who complained of his lack of respect. (Disrespect to another councillor contravenes the 'Councils Code of Conduct for Members' and is actionable if a formal complaint is made).

Silence reigned for a moment before he changed tack and continued...

"So I think you're doing a splendid job at Lowther Theatre. I've visited it many times and seen many shows, and all I can say, absolutely excellent, the new seating's marvellous, the new bar, it's absolutely wonderful. I'm so proud that we've got such a venue in the Borough. The only main cultural venue in the Borough. So I take my hat off to you. To increase the car park revenue is absolutely brilliant, I just hope you fix the potholes...."

Cllr Ashton continued in a similar vein for a while longer, before the Vice Chairman, (Cllr Vince Settle) endorsed what he had said, adding that 'mico-manging' individual items was too much for the Committee and he didn't want that.

The Chairman then invited Cllr Roger Small, (newly appointed Council representative on the Trust) if he would like to comment. .

He said having attended only two meetings he was still finding his feet but he had listened to what members of the Committee had to say. He said it was important they do get behind Lowther and recognise the excellent work the Trust had done and would continue to do, but he would take on board some of the questions and points that had been raised in the meeting.

Cllr Elaine Silverwood spoke again saying:

"I feel it would be really really appropriate and a good idea to perhaps have a working group that could be appointed to look into the future of Lowther, and to ensure that the Service Level Agreement has properly measurable objectives, and that the Annual Report that we're discussing tonight, and future reports, specifically address Trust's performance in relation to those objectives that are in the SLA."

The Chairman asked if that was a proposition and Cllr Silverwood said it was. Cllr Jan Barker seconded it.

Cllr Ashton indicated to speak on the proposition and said

"I think we're in danger of getting involved in a Charitable Trust that runs the theatre that we give a grant to. What the Hell's it got to do with us what Lowther does as long as they run a successful theatre and do it properly?

I think us trying to micro-manage it is ludicrous. It means - what we are saying, Chairman if we do this, is saying we don't trust Mr Lince and the people that work with him, and the volunteers (Indistinct words: 'that run'?) the theatre because we're going to get too involved in it.

We're going to waste our time, and waste the Trust's time, when they should be spending their valuable time on making sure that in actual fact, that theatre is successful.

What it will be, it will be is a talking shop, and what they'll want to do is look and delve into all the little things at the theatre.

And we all know why Cllr Silverwood's doing this. There's an ulterior motive, and we *ALL* know what that ulterior motive is Chairman. Without saying anything, we all know what it's about and that why she's been asking questions that were ruled out of order before...."

Cllr Silverwood tried to clarify the motive behind her proposition, but was shouted down by Cllr Ashton who continued.... .

"Just make sure that we don't start meddling in Lowther theatre's....."

Cllr Silverwood protested loudly to the Chairman saying:

"That's highly insulting Councillor Ashton. I'm doing my job...."

But she was again shouted down by Cllr Ashton who had raised his voice to coercive levels in order to drown her out, and the Chairman briefly lost control of the meeting for a short period as all three tried to shout each other down before Cllr Little managed to bring the meeting back to order.

She said if no-one else wanted to speak, she would take a vote on Cllr Silverwood's proposition as had been seconded by Cllr Barker. Cllr Barker reminded her that she had also made a proposition that an expanded report be provided to the next Committee.

The Chairman said she thought that was a suggestion, but Cllr Barker said she wanted it treating as a proposition.

The Chairman appeared to accept that situation and parked it aside for the moment and, quite properly asked if anyone wanted to speak to Cllr Silverwood's motion before moving to the vote.

No-one did, so the vote was taken, and (not unexpectedly) the Conservative majority on the Committee outvoted Cllr Silverwood's proposition to do what, in effect - and as we have shown earlier - was not only their job, but their direct responsibility as custodians of the public purse.

Cllr Barker was asked about her proposition and she again called for an expanded report to be considered by the Committee.  The Chairman asked what she wanted in it, and Cllr Barker said it should contain the matters she referred to earlier, and other matters addressed at the meeting that evening.

Cllr Small intervened and said he intended to attend all Tourism and Leisure Committees in future, and if it would help, he would be happy to talk about Lowther and answer questions as far as he was able to do to. (He is of course, as a Trustee, constrained to act only in the interests of the Trust, not those of the Council in such matters).

All very helpful of course, but it was not what Cllr Barker's proposition required, and that was for the Lowther's Annual Report to contain more information *for the public to access*, rather than Committee members.

The Chairman seemed to think Cllr Small's offer dealt with Cllr Barker's proposition, and said she would move on.

It hadn't dealt with it of course.

She should have asked if anyone wished to second Cllr Barker's proposition. 

But she didn't do that, and she did 'move on.' to the next agenda item.

 OUR COMMENT ON THE MEETING.

There is a dichotomy at the heart of this episode, and it is about power, and about the balance between the role of officers and elected councillors.

Some in Fylde's Conservative group simply do not see the need to work consensually with other councillors who have been elected with an equal mandate. .

We've heard Cllr Ashton say as much. For people like him, who stood as a political party candidate, and was elected to an overall majority, that's all that matters. They have the power to decide what happens and no one else's view matters.

It's an arrogance we deplore.

And Fylde's officers are failing the Council as a whole when they do not provide the information necessary for elected members to take properly reasoned decisions. When the senior officer was questioned about the quarterly reports the Trust was required to submit to 'The Council' he said:

"No, they're not given to members. They're received by officers and assessed according to the SLA, and it's an action that officers deliver on behalf of members"

As we explained earlier, this should not be the case at all. .

Apart from the previous reasons we gave, it's wrong in principle, because we can't 'unelect' those officers whose performance or decisions we do not wish to support. We can unelect councillors.

Furthermore, if it is the case and as Cllr Silverwood stated, that Cllr Mrs Oades had submitted written questions in advance of the meeting - only to be told to address them to the Chairman on the night, and that (apparently) was even without Mr Lince having had the benefit of seeing the questions he would be asked via the Chairman, then here again, we see an appalling failure on the part of the officers.

With these sort of things happening, we find it really difficult to believe that officers are demonstrating sufficient professionalism and politically impartiality. .

We applaud Cllr Silverwood in her attempt to convince the Committee of their need to receive the information that allows them to objectively relate the subsidy payment to the trust's performance AS THEY ARE REQUIRED TO DO by their own Service Level Agreement.

We maintain the Committee's decision not to do this is a dereliction of its duty, and in evidence of this, we quote from the current Service Level Agreement (which has both mandatory and optional requirements "must" and "should"): :

At Lowther pavilion, the services provided in exchange for the subsidy paid by Fylde Council are set out in the Service Level Agreement as:

(i) The maintenance and development of Lowther Pavilion as a cultural community facility, for the benefit of residents of and visitors to the Borough.

(ii) The provision of a balanced and diverse programme of performing arts and entertainment, including dance, drama, music, musical theatre, variety and comedy; encouraging innovation through the use of new technology and the support of new writing and performing talent. .

(iii) The development of new audiences and encouragement of existing audiences to visit more frequently, building participation in the arts locally; accessible to all sectors of the community through programming, marketing and community engagement work.

(iv) The promotion of the performing arts in Fylde, supporting and developing local amateur groups, volunteers and the wider community. The pavilion shall be available for hire by local community/amateur groups for a minimum of 120 sessions per year.

(v) The free use by the Council of Lowther Pavilion and its facilities for the annual meeting of the Council and up to 10 other councillor

Mandatory clause 7 of the Agreement requires the Trust to comply with whatever Performance Measures and guidance the Council requires. .

"7. The Provider must comply with the Performance Measures and any specific guidance issued by the Council in deciding how it will spend the Annual Grant."

Key Financial reporting aspects are:

13. The Provider will keep accurate financial records in accordance with GAAP and will make them available to the Council on request, including access to all
relevant receipts and invoices. The records must in particular provide a clear audit trail of how any Grant has been used d

14. The Provider will supply to the Council a copy of its pre-audited accounts 3 months after the end of each Grant Period and a copy of the professionally
audited accounts within 6 months of the end of each Grant Period.

15. The Provider will supply a copy of its annual budget to the Council one month in advance of the commencement of each Grant Period, which must reflect the Annual Grant payable by the Council for the provision of the Services.

16. The Provider will supply quarterly management accounts to the Council showing details of expenditure and income in the period and accumulated figures against budget for the year to date. Where the financial statements are inconsistent with the reasonable expectations of the Council the Provider will clarify and give reasons for the situation, explaining how the agreed budget will be achieved.

The process to assess compliance with the Service Level Agreement is also prescribed viz

"The Performance Measures: :

Quarterly meetings will be held between representatives of the Provider and the Council, where the information required by this agreement will be reviewed."

And the Quantitative Measures of Performance that must be reported to these meetings are set out as being:

"The Services to be provided within the operating budget, provided in accordance with clause 17.

A breakdown of the number of complaints received from service users and how they have been resolved.

Number of sessions utilised by local amateur groups, volunteers and the wider community.

Number and percentage of self-promoted shows which breakeven and/or make a profit"

There are other similar requirements addressing performance Quality.

As we said earlier, it is perfectly proper that officers should receive and review the information provided by the Trust against the performance requirements of the Agreement, but what they are not doing is reporting and providing a commentary on those matters to elected councillors.

Clearly Cllr Ashton prefers to rely on his personal subjective views of the Trust's performance, and does he not believe Councillors should objectively and transparently relate the requirements of the Service Level Agreement (that he helped to create) to the subsidy they pay to the Trust on our behalf.

Cllr Silverwood takes the reverse view.

We agree with her.

We also thought Cllr Ashton's remarks toward Cllr Silverwood were disgraceful and completely inappropriate.

Had we been chairing the meeting we like to think we would have stopped him and the meeting in its tracks and required him to apologise to Cllr Silverwood before resuming the meeting.

 SO WHY FYLDE IS PAYING THE COURT COSTS?

In our last article "Lowther Goes Legal" in 2018, we learned from an amendment proposed by Cllr Liz Oades that £4,000 of taxpayers money had already been spent on litigation in support of Lowther Trust by Fylde's Chief Executive - using what he referred to as his 'emergency' powers.

Cllr Oades amendment proposed that the £175,000 in future court or legal costs they were debating should only to be made to the Trust if it was given as an interest-free loan (rather than as an increase in their subsidy payment).

This row centres around the Trust's proposal to terminate the lease on Lowther Pavilion Cafe which is run by the same private business who have had the lease for more than 30 years.

Commercial leases often contain a provision to renew them on expiry (and even if they don't, there can be an implied ability to renew). Ones we have seen include a right to apply for renewal, *for which permission will not be unreasonably withheld*'

We've not seen the current Pavilion Cafe lease, but we wouldn't be surprised to find it says this or something like it, especially if it follows the same form as the leases that were granted when Fylde Council was running the Pavilion.

We also know that Lowther Trust was negotiating with lessee of the cafe and that discussions broke down.

We thought the Trust might have served what's called a 'Section 25 Notice' to end the cafe lease altogether.

After being given a S.25 notice, a tenant who wanted to exercise their right to renew a commercial lease would usually argue their right to renew in a court - and probably by contesting the grounds under which the landlord (in this case the Trust) had used to end the lease.

Excepting for failure to look after the property, or failing to pay the rent, as we said in the previous article, there are usually only two ways a landlord can oppose a lease renewal and terminate a tenancy.

One is that you're going to demolish or redevelop the property and you want to do something different with it.

The other is that you want to take back control of the property to use it yourself.

This brings two aspects into play.

- The first requires a convincing case to be made to the court that you are in a position to demolish and/or redevelop the property and use it for something else.

- The second will likely be about justifying the use to which you want to put the property yourself, and your ability to do so.

 Redevelopment

The first option - redevelopment / changed use - is usually considered the easier of the two for a landlord to justify.

It typically only needs the court to be convinced that the landlord has the necessary ducks in line (things like planning permission, finance, contractual and legal bits and pieces) for the court to look sympathetically on granting the termination of a lease.

Up to last year, and for most observers of such matters, this route would have seemed the most likely that the Trustees would follow. .

We'd all seen the newspaper reports, and a posh brochure full of artists impressions of what the new building would look like. They'd been fundraising for the new building with 'get your name etched on a window' schemes and so on.

The Trust's big plan was to redevelop and extend the Pavilion, and one facet of this was their plan to create something more like an upmarket bar and restaurant than a cafe.

Although not explicit in their plans at the time, the impression was that they would to do away with the existing cafe.

More recently, they were granted planning permission by Fylde - so that was another tick in the box.

So they might have thought that more or less all that was left to do was to put up a convincing show to a court that they could raise the £4million or £5 million the redevelopment scheme would cost to implement.

But their plan went a bit awry.

From an involvement we had some years ago (at the time the Council wanted to build its Civic Suite above Lowther), we knew there were enforceable covenants attached to properties surrounding the Gardens that could have prevented any additional building within Lowther Gardens.

And from a more recent matter on behalf of one of our readers, (regarding use of Lowther for political meetings), we knew the Charity Commission had not included the covenant that precluded political meetings in the Governing Document for Lowther Gardens Trust - but they *had* included the aspect of the covenant that set out to prohibit additional buildings or extensions to existing ones.

So we were pretty sure the Trust would not be able to undertake it's plans for the redevelopment - and we were puzzled why they had been pressing ahead with them, when they must have checked whether their Governing Document allowed them to do so or not, and would have seen that it prevented them from doing so.

We were also puzzled why Fylde Council might have validated a planning application for redevelopment which the applicant (the Trust) was prevented from undertaking by its Governing Document.

(That's especially the case when the Council was also both a Trustee of Lowther Gardens, and the body who had created the first Governing Document with the prohibition on building that was set out in it, and therefore the Council ought to have known the development was prohibited).

But then, we were, (and we still are), quite confused about just what the Council did and did not know at various points in time regarding this matter.

Some of their recent behaviour suggests to us that they really did think the Governing Document allowed the redevelopment to take place. .

This, in turn, made us wonder if there was a 'false' governing document that had found its way into Fylde's administrative systems and whether Fylde knew it was not a bona-fide document or not.

We'll get to that shortly.

One other downside to using the 'Redevelopment' justification in court is the need to put forward a convincing argument that you can realistically get your hands on £4m or £5m that the redevelopment will cost.

Whilst there may be other sources, the more usual source for large scale grant funding of such projects would be one of the lottery-funding bodies.

But at present, the grant giving climate is nowhere near as easy as it used to be. There have been recent policy changes within the lottery grant giving organisations. This is partly because of pressure for spending on community and social support, and partly because there is nothing like as much money entering the coffers of the lottery funding bodies because people are spending less on lottery tickets.

You only have to ask the folk at Lytham Hall how hard it is to get (and keep) Lottery funding these days. .

We imagine this sort of funding difficulty will make the job of convincing a court that you have the funding 'ready to go' quite a bit harder.

 Self-Use of the Property

This route is usually less easy to justify to a court.

Usually you'd have to justify the need you have for the use you've proposed, and that you had the necessary ducks in line in terms of ability and experience, funding and so on - in short, that you could make a success of it if the court agreed to refuse a lease renewal.

Whilst demolition or large scale re-development is an easier justification to advance, readers will see that refusal to renew on the basis of self-use is quite a difficult judgement call for the court to make, and because of this, it might involve a range of professional experts giving evidence to the court on behalf of each party to the dispute. This ups the court costs of course.

 ANALYSIS

So to try to shed some more light on how the Trustees persuaded Fylde's Conservative majority to fund their legal costs, we did some research.

The scheme to redevelop the Pavilion was announced on the front page of the LSA Express in July 2015 - so it began sometime before this date.

In November 2016, Fylde's Tourism and Leisure Committee looked at renewing the Trust's Service Level agreement which included a budget forecast. .

Readers can follow this link to see the Trust's five year budget forecast (2017 to 2022) for themselves.

Toward the foot of the first page the forecast shows the income anticipated from the cafe lease over the period, and readers will note that in 2017/18 the Trust expected to receive £13,500 in cafe rental income.

But for 2018/19 this had doubled to an expected £26,000 which then rises steadily to £29,000 at the end of the five year term.

What this suggests to us is that either the Trust hoped their tenant would agree to doubling the rent they were paying, or that was the turnover the Trust expected to generate if they terminated his lease and either completed the redevelopment of the cafe by April 2018, (or took over the cafe operation themselves in that year).

At present we can't be sure when the Trustees served notice on their cafe tenant, but it looks as though it might have been between 2015 and 2017.

But the issues about the Governing Document only seems to have come to light in 2018 when the Council found out about the court case the Trustees had sparked into life, and started looking at was going on at the Trust in some detail.

So it's possible, and probably likely, that when the Trustees served notice on the cafe tenant, they had expected to be able to use their redevelopment proposals as a key argument to oppose the renewal of the cafe lease.

But then, doubt emerged about whether the Governing Document allowed them to undertake the redevelopment at all, and when this doubt was added to the policy changes and shortage of funds in the grant-giving bodies, we think it's likely that the main (redevelopment) arguments they might have hoped to rely on in court to oppose the renewal of the lease would have diminished considerably.

Furthermore, if that was the case, and the Trust's main argument to oppose renewal of the lease had diminished - they might have to argue that they wanted to take over the Cafe themselves in the hope they can run it themselves to produce a greater income for the Trust.

We're not experts in the law of property, but it seems to us that, if you serve notice to terminate a commercial lease on the basis that you want to run something yourself, it's unlikely that a court would be willing to support a refusal to renew that lease if all you wanted to do was to offer another lease or contract to someone else to run it. (The logic being that if you don't want to run it yourself, then you already have someone running it within the existing lease).

So we imagine the Trust would have to show the court they had the expertise to recruit and manage directly employed catering staff and associated management, and that in doing so they could be more financially successful than having the lease - and we think that's what the arguments would likely be about in court. .

If our suppositions here are correct, then in 2018, the confidence that the Trust might have expected to enjoy in successfully opposing the renewal of the lease would have been severely diminished, and if they failed to convince the court, they could have been looking at having to find the likely court and other costs of around £175,000.

There's another aspect to this matter as well.

We understand that if a Trust takes a decision that is within the powers conferred on them by their Governing Document, and that decision results in financial loss, then the Trust itself may legitimately bear the cost.

But if the decision taken is not within the powers accorded by their Governing Document, then the individual trustees may be personally liable for the loss they have incurred.

If it was the case that a Governing Document purporting to allow additional buildings or extensions did exist, and if the Trustees had been relying on this 'false' Governing Document for their redevelopment plans, and those redevelopment plans were a key plank in their argument to oppose renewal of the lease, then it seems to us that the individual Trustees were at considerable risk of facing personal financial loss if the court found against them.

We also noted the resignation of Fylde's appointed Trustee soon after the matter was first discussed 'in camera' by the Council.

But as we've seen above, at the Tourism and Leisure Committee meeting this January we heard Cllr Elaine Silverwood say to the Chairman of the Trustees (before she was interrupted by Cllr Tim Ashton)

"In the report that came to Council in December, when a decision was being made on the request that had been made by the Trustees for the money, it was said that if you were unsuccessful in securing that money, then you, and the rest of the Trustees would resign, Now, obviously..."

So, we can now be clear that Fylde Council was placed in a difficult - if not impossible - position by the Trustees. .

They had threatened to resign en mass as Trustees unless Fylde assumed responsibility for the costs of the court case that they themselves had triggered by serving notice to terminate the cafe lease.

This is undoubtedly why Fylde agreed to spend up to £175,000 of our taxes supporting the case the Trustees were arguing in court.

The underlying problem here is that, because Fylde is the only Trustee named in the Governing Document and they chose to appoint other several Trustees (for good and proper reasons), Fylde itself cannot resign as a Trustee, but they can.

So if the other Trustees did resign and walk away, Fylde would arguably have to pick up the bill anyway, and they would be faced with contractual obligations for shows and events that were booked - without anyone to manage and operate the Pavilion.

So they caved-in to the demand. .

(It's just possible there could be another reason for their supporting the Trustees, and we're still looking into that.)

For ourselves, we might have seen that threat from the Trustees in a different light.

To be honest, if we'd have been dumped on like that, we would have immediately accepted the Trustee's resignations. We would have renewed the lease on the Cafe at its previous level or with an agreed small increase and stopped the court case, and we would have brought someone in to manage the operation. (Maybe a former or retired theatre manager) and seen if we could contract with employees within the Trust's commercial arm (Lowther Gardens (Lytham) Management Ltd) to provide the necessary operational services and / or use the expertise of some of the local amateur dramatics groups who are used to staging shows on their own account.

There is no way we would have left in place those responsible for a potential bill of £175,000 in the hope (not certainty) of generating an extra £13,000 a year in income. .

We now see more clearly why Cllr Oades' amendment at the December Tourism and Leisure Committee said:

"1 That the Governing documents are re-drafted and the existing Trustees removed from office, to be replaced by Trustees with the necessary financial, legal and theatrical expertise.

2 To ensure that, in future, Fylde officers attend meetings of the Trust, minuting and meetings and ensuring that correct governance procedures are followed at all times."

What's harder for us to understand is why Fylde's Conservative majority unanimously voted down Cllr Oades' amendment to accept the resignation of the Trustees whose decisions had caused such a problem.

It also explains more clearly why, in the resolutions approving the increase of up to £175,000 in the subsidy payment to the Trust for this year the Conservative group leader proposed that: :

"the Trustees, together with the Council, agree to comprehensively review the Governing Document to appropriately reflect the Councils position as the permanent Trustee and, as a minimum, it will include a requirement that Trustees must receive approval from the Council before commencing, settling or taking any litigation action (except where the litigation is directed by the Trusts insurers), or before taking any material step in any statutory process."

Frankly, we don't think that is anywhere near enough.

As we said in a previous article: :

If this whole situation has come about because the Trust has been so delinquent or incompetent that it started a legal action it didn't even have the money to complete - and it has now pulled Fylde in to cover the cost of its incompetence and bad judgement, the we and, quite properly, most of the taxpayers of Fylde, would have the right to be very angry about it.

 THE GOVERNING DOCUMENT

This, (as its name suggests!) governs what the trust and Trustees may and may not do. Any changes made to it by the Trustees must be registered with the Charity Commission.

We have a copy of what we think was the original one, and we know of two amendments approved by the Commission which are all fine and dandy. .

But some changes to the Governing Document are prohibited.

When we inquired over another matter a couple of years ago, the Charity Commission told us

'According to our records this charity is governed by a Scheme dated 3 June 2009. The only restriction within the governing document is contained in Clause 7 which states:

"the trustees must not erect any additional buildings or extend the existing Pavilion".

For information, please find attached a copy of this document.'

That's very clear.

It's a mandatory clause. 'must not' means exactly what it says. It doesn't say 'should not' or 'ought not to.' It is a prohibition.

And, as if that wasn't strong enough, Clause 9 also restricts the Trustee's power to amend the Governing Document - saying: :

9. Power of amendment

(1) The trustee (subject to the provisions of this clause) may from time to time amend the trusts if it is satisfied that it is expedient in the interests of the charity to do so.

(2) The trustee must not make any amendment which would have the effect directly or indirectly of

(a) altering or extending the purposes of the charity;

(b) authorising the trustee to do anything which is expressly prohibited by the trusts of the charity:

......"

We believe that Clause 9.2 (b) prohibits the trustee from changing clause 7 - (because Clause 7 is the only user restriction within the Governing Document)

We covered the matter of the Governing Document in considerable detail in the Trusteeship and The Governing Document section of our article 'Farce, Fiasco or Tragedy?' last November, so we're not going into that again here.

But the crucial unanswered question last November was whether a third amendment had been made to the Governing Document that somehow overrode the prohibition, one that would allow extensions and or additional buildings - as the Trust's Grand Plan for the redevelopment of Lowther Pavilion envisaged.

We now have the answer. .

There *has* indeed been a 'false' version of the Governing Document created by someone, and we believe it has been circulating within the Council.

At present Fylde are unwilling to disclose any copies of the Governing Document to us, arguing that the Council holds them as a Trustee - and in that capacity, they are exempted from the requirements of the Freedom of Information Act.

We still have an outstanding inquiry with Fylde on this matter. At present, they have been too busy to answer it, but it might provide more illumination when it is eventually answered.

We know the existence of the false Governing Document from something the Charity Commission wrote in response to an inquiry:

"We are in correspondence with the trustees of the charity and have advised them that any plans which extend the footprint of the pavilion would require a scheme of the Charity Commission. We have provided them with guidance on how to apply for a scheme.

We would normally expect the trustees to conduct a public consultation before applying for a scheme and we have advised them of this. We will make a scheme if the trustees can satisfy us that it is in the best interests of the charity, taking into account any objections or wider concerns.

In relation to the charity's governing document, we were not aware of the changes purportedly made to clause 7 (which prohibits any extension to the pavilion). The trustees have informed us of the change as part of our ongoing correspondence and we have advised that it is invalid and that they will therefore need a scheme.'

The key point here is the last paragraph.

Where it says 'we were not aware of the changes purportedly made to clause 7 ' This means an amendment has been made to the Governing Document which the Charity Commission knew nothing about, so it is not valid.

And the part that says they

'have advised that it is invalid and that they will therefore need a scheme.'

both confirms the existence of an invalid Governing Document and furthermore, it puts the block on any extension or additional buildings unless or until a change to the Governing Document has been agreed between the Trust and the Charity Commission.

Readers should note that in this context 'a Scheme' is, to all intents and purposes, a new Governing Document that will 'override' the current one.

We've been looking at the official guidance that the Charity Commission issues to its staff who advise Trusts like Lowther about how to make a new Scheme. The Commission seem to treat it all very seriously. Our readers can follow this link to the Charity Commission's Guidance.

Whilst some people might be seduced by the idea of a modern-looking Pavilion with a more upmarket ambience, we suspect there will be others who will not want to see, car parking lost to new buildings and trees lost to replacement car parking spaces, together with a first floor restaurant with roof terrace where activities could perhaps attract passers-by after the tall screen planting is removed to the seaward side, and the building opened up to be seen more easily from Lytham Green and West Beach.

As the Trust's own documentations explains, this would be:

'Including a two storey extension to the east to form a first floor restaurant with external roof terrace'

Of note in this regard, Fylde's Environmental Health Department felt it necessary to advise Planning officers that

'1. The outside terraces shall be closed to patrons no later than 21:00 on any day.

2. There shall be no amplified entertainment taking place on the terraces.'

That suggests to us that there might have been some consideration of providing amplified entertainment on the roof terrace.

The Trust's documentation also proposed to:

'.....open-up views and access into and out of auditorium by re-landscaping front of building to be more pedestrian friendly'

The plan here was to enlarge the area of the car park by completely removing the raised bed and trees opposite the entrance to the Pavilion in one direction, and extending it toward the sea in another direction - by breaking into the grassed and planted areas there.

This would remove all of the tall windbreak and shelter planting that currently protects the car park behind it. It would also have opened up the whole frontage of the Pavilion to be more easily seen by passing traffic and pedestrians.

These were very controversial plans.

So we can see some folk local to the gardens not being so enthusiastic about the redevelopment plans, and wanting to retain the peace and quiet that the Gardens were intended to offer - as John Talbot Clifton indicated in his 1905 Indenture where he required the Council who accepted the land on behalf of the people:

'... not at any time permit or suffer meetings for the discussion of political religious trade or social questions or other matters of controversy to be conducted or lectures or addresses to be delivered on any part of the said land nor use or permit the said land...."

and

'...not at any time permit or suffer any games other than lawn tennis, croquet, bowls or games of a similar nature"

What this shows is his clear desire to have everything within the gardens as peaceful and tranquil as possible.

If the Trust's planning application is anything to go by, we think there will be some objections to the change. .

Their planning application attracted nine individual letters of objection and a petition signed by 215 people stating;

'We the undersigned urge Fylde Borough Council as a responsible Trustee to Lowther Gardens in Lytham and respect the covenant that applies to the land as it was gifted the Council in 1905. We believe no more of the gardens should be lost to buildings or car parking. We believe no more buildings or erections of any description whatsoever should be built without licence from John Talbot Clifton, his heirs or assigns having first been obtained'.

(That requirement to obtain the consent of heirs and assigns harks back to wording of the Indenture as well, so it's possible that some of the signatories would be people from around the gardens who held the benefits of the Covenant on their own property, and were thus able to enforce them)

So we can't imagine it will be plain sailing for the Trust to get the Charity Commission to approve a new Scheme that would allow the proposed re-development to take place.

If the Trustees want to extend or add to the buildings in Lowther Gardens they have been told they will have to apply to the Charity Commission for a new scheme and that might involve another public consultation.

The Trustees might decide to do a public consultation themselves of course - in the hope of presenting their plans in a positive light.

The Trust's aim in this would likely to be able to show public support in their bid to disregard the conditions under which John Talbot Clifton gave the land for the benefit of local people.

But the process is quite long and involved, and it's by no means certain they would voluntarily offer to undertake a public consultation on their somewhat controversial plans (which remove quite a lot of the trees as well as alter the Pavilion).

However, if the Commission becomes aware there is public concern about the plans, we suspect they will require  the Trust to undertake a public consultation on them.

Interestingly, we noted that the Charity Commission is trialling a new website form which allows people who may have concerns about a charity to contact them with details of their concerns.

If any of our readers want to express their concerns to the Charity Commission, or to ask the Commission to ensure a public consultation is undertaken if the Trustees of Lowther Gardens do apply for a new scheme  they can Follow this link to the Charity Commission's online form and make their concerns known.

There are two more aspects about the invalid Governing Document that need some thinking about as well.

An invalid Governing Document clearly does exist, and we can only think it will have set out to override or remove the prohibition on adding new buildings or extending the footprint of the existing pavilion.

We're left wondering who created it, and how and when it landed in Fylde Council's possession (if indeed it did).

Could it have been created in the hope that no-one would have spotted the fact that it was invalid? Might it have been intended to make the re-development plans sail through more easily? Was it intended to convince funding organisations that there was no impediment to the Trust proceeding with the redevelopment if they were to apply for grant funding?

And if that was the case, who might have known about it? Who might have helped or supported it?

These are all important questions if there had been some sort of fraudulent endeavour to bypass the requirements of the Trust's real Governing Document

We're not at the bottom of all this yet, but we do hope to get there eventually.

One final consideration we had was a wider matter that cropped up as we were trawling the Charity Commission's advice.

If a Charity has money donated after an appeal for funds, then as we understand it, that money can only be applied for the purposes set out in that appeal (Unless the Charity Commission agree to it being otherwise - and the Commission seem to be quite particular about keeping to the script on that that as well).

Part of the fundraising initiative that seemed to us to be associated with the redevelopment (as opposed to fundraising for repairs and maintenance), was something we noticed the LSA Express report of the plans. It quoted the Trust as saying:

"....individuals and groups are being given the opportunity to have their names etched on the windows for posterity at £1,000 a time as part of a new fund raising drive intended to raise at least £500,000." ;

The article went on to say that the Trust hoped to attract 500 donors, each giving £1,000 under the 'Band of Names' scheme that would be engraved on the glass and walls of the building creating a solid band around the exterior.

Whilst these donations have undoubtedly been called for, whether anyone has donated to the 'Band of Names' yet we don't know, but on the broader picture, we do wonder; if people have given money for a redevelopment scheme that doesn't come off, will the Trust have to refund what they have received by way of donations? And how will they be able to separate donations given toward the re-development scheme and those whose donations were for other matters?

 AND FINALLY

Although none of the other media outlets have picked this story up, counterbalance readers (as ever) now have something closer to the full picture.

As we said at the outset we have only two remaining 'unknowns' in this matter

1. Whether what we now know to be an *invalid* Governing Document has been fraudulently, or otherwise improperly used to gain some advantage, and whether any further action will flow from that if it has, and

2. Whether Fylde Council

• knew it was invalid all along, or 
• whether they had been hoodwinked into believing it was a valid document when it was not, or even
• whether they had been complicit in creating or supporting its aims.

Either way, it is now clear that the redevelopment proposals for the Pavilion, (and the consequential notice to terminate the cafe lease that flowed from them) are likely to have been based on an invalid document, and on what a court might now believe to be an invalid or insufficient justification to terminate the lease.

So the court costs of £175,000 might just be on their way to Fylde's taxpayers

Dated:  7 February 2019