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PCC members — or trustees?

19 February 2016

Thank you for your column on the PCC and the Charity Commission (5 February), but you still don’t quite say whether PCC members are trustees.

 

Your recent column did not clarify whether PCC members are liable for the debts of the PCC as trustees are, as indicated in the Charity Commission guidelines.

 

THE Church of England, individually and collectively, alongside other mainstream denominations, has been recognised as a charity by the Charity Commission.

When the Charity Commission recognises an organisation as a charity, it accepts both the charitable purpose of the organisation and the means by which it is governed: that is, its constitution.

Because of the legal structure of the Church of England and its parochial church council systems, the individual PCC member is not in the same position as the general instruction given for the position of trustee in Charity Commission.

I will quote some sentences from the website https://churchofengland.org/ under the heading “Parochial Church Councils: Legal Position of Members”:

“A parochial church council is a body corporate.”

“The Charity Commission accepts that PCCs are charities.”

“The affairs of the PCC must be conducted, and the assets of a PCC must be held and applied, solely to promote the charitable purpose for which the PCC is established under the 1956 Measure, and not for other purposes (even if charitable) nor, a fortiori, for the private benefit of individuals.”

“Since a PCC is a body corporate, liabilities it incurs in contract or tort are enforceable against it rather than against its members. A PCC member can only become personally liable for a debt of the PCC if she or he has voluntarily accepted legal responsibility or if the debt has arisen in circumstances involving a breach of the PCC member’s fiduciary duties. (For example, if the PCC member has ordered work or goods for the PCC without the authorization of the PCC.)

“Similarly, statutory enforcement notices or fines imposed on the PCC will be enforceable against it, as the body corporate, rather than against its individual members.”

“The duties of a trustee in the strict sense also apply to all persons who occupy a fiduciary position analogous to that of a trustee . . . for example, the directors of a company or other body corporate.”

There is a great deal more legalese to read through, and the web page can answer detailed questions for those who wish to know more.

But the summary is that PCC members have the duty of protecting the assets of the charity; to show a reasonable degree of care and skill in administration of the charity (such as taking professional advice where appropriate); to not receive financial benefit from the charity, directly or indirectly; to not take advantage of information or knowledge acquired by being a PCC member/trustee; and not to put themselves in a position of “conflict of interest”.

Some charitable trusts, where the trustees could be personally liable, take out an insurance policy to protect individual trustees if something goes wrong. But there is no significant need for a PCC to do this.

But watch out for examples where there are minor discrepancies that could arise. Spending outside of a PCC-agreed budget, whether for capital or revenue, is a breach if authorised by an individual — or even the treasurer — rather than the PCC. The latter is there to execute the financial decisions of the PCC. An individual could be in breach if instructing unauthorised expenditure on a building project.

If an emergency arises that requires immediate action, a quick circulation of emails is now common to get the necessary consent. Of course, the PCC members should ensure that the emergency payment does not take the PCC into debt.

 

Send your issues and questions to maggiedurran@virginmedia.com.

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