Protocol on Member/Officer Involvement in Partnerships Involving the Borough Council

Introduction

This proposal is designed to support Members and Officers and provide advice and help to them in the work they do with partnerships and voluntary groups.

Members and officers should be aware that by law, the Council can only carry out activities for which it is given a statutory power to undertake. Members and officers becoming involved in partnership work which is outside of these statutory powers could encounter difficulties. Such work could be "ultra vires" and consequently the District Auditor may investigate such situations which could result in their being subject to legal challenge.

Members and officers are therefore advised to seek legal advice if they have any doubt regarding the partnership working, or any part thereof, in which they are likely to become involved.

Generally, there is no restriction on a member or officer becoming involved in any partnership or group as a private individual. However, there is always the risk of the individual's position with the Council being used, even if inadvertently. Members and officers are therefore still advised to seek legal advice before taking on private commitments of this type.

Any matters contained in this protocol which members or officers do not understand or which require clarification should be discussed with the Council Manager, the appropriate Corporate Director or the Assistant Council Manager/Monitoring Officer.

1. The Protocol

1.1 A "partnership" is defined as a joint working arrangement were the partners:

- are otherwise independent bodies;

- agree to co-operate to achieve a common goal;

- and, to achieve it, create an organisational structure or process and agreed programme;

- and share information, risks and rewards.

Such joint working arrangements will include town-wide or strategic partnerships, locality partnerships, constituted voluntary groups and smaller community groups.

1.2 The Council may from time to time become involved in partnership working and it seeks to ensure that any member, officer and the Council itself is not exposed to any unidentified and unexpected liabilities or risks.

1.3 Authority to become involved with a partnership

• Any member who is approached or wishes to become involved in a partnership should discuss the matter and the extent of their involvement with their Political Group Leader and/or the Council Manager before taking the matter further.

 

• The member should only accept or become involved in a partnership after receiving approval from their Political Group Leader and the Council Manager, the appropriate Corporate Director or the Assistant Council Manager/Monitoring Officer. The member should have this approval in writing.

• It is the responsibility of the Assistant Council Manager/Monitoring Officer during discussions on the member's involvement within a partnership to determine what the role of the member will be in the partnership and if he/she is representing the Council. The member and the Assistant Council Manager/Monitoring Officer shall also discuss and agree if any support and/or training are required.

 

• It is the responsibility of the Assistant Council Manager/Monitoring Officer to ensure that the Council Manager, the relevant Corporate Director and Financial Services are aware of the Council's involvement in any partnership.

 

• Any officer who is approached or wishes to become involved in a partnership should discuss the matter and the extent of their involvement with their Manager and/or Head of Service. The officer should only accept after receiving approval in writing from his/her Manager and/or Head of Service.

 

• It is the responsibility of the Manager, whilst discussing the officers' involvement within the partnership, to be clear as to the role and whether the officer approached is the most appropriate representative to the partnership.

 

• Once the most appropriate officer representation is determined, it is the responsibility of the Manager to ascertain whether additional support and training is needed, and to make arrangements for the same.

 

• It is the Manager's responsibility to ensure that the relevant Head of Service, the Assistant Council Manager/Monitoring Officer and Financial Services are aware of the Council's involvement in any partnership.

 

• The Head of Service should inform his/her Corporate Director of the new partnership involvement and activities of the officer concerned.

2. Duties

2.1 Members must remember that if they act as a Trustee for a charitable partnership or body, then their first duty whilst acting as a trustee is to the charity. However, Members, when working within a partnership remain members of Shrewsbury and Atcham Borough Council and are still bound by the relevant legal requirements including the Code of Conduct for Members and any local protocols.

2.2 Members working in or associated with a partnership are still bound by the Council's constitution, its policies and procedures, and its financial regulations. They should immediately report to the Council Manager when they feel that the partnership is not acting in a manner acceptable to the Council or in the public interest.

2.3 Officers must remember that if they act as a trustee of a charitable partnership or body, then their first duty whilst acting as a trustee is to the charity. However, all officers when working within a partnership remain employees of Shrewsbury and Atcham Borough Council and are bound by their contract of employment, the Council's constitution, policies and procedures, the protocol on member/officer relationships, financial regulations and any local protocols.

2.4 Officers must immediately report to their line Manager (or to the next level of management above if the line Manager is absent) when they feel that the partnership is not acting in a manner acceptable to the Council or in the public interest. 215.45

3. Signing Contracts

3.1 Members working for a partnership should not sign any contracts or legally binding documentation on behalf of the partnership or the Council. Only authorised officers have power to sign documents of this nature.

3.2 Officers working for a partnership should not sign any contracts or legally binding documentation on behalf of the partnership unless written confirmation of legal advice that it is acceptable can be provided.

4. Conflicts of Interest

4.1 A member when working in a partnership should immediately declare any conflicts of interest or potential conflicts of interest that he/she may have or that may be perceived and request the partnership to record them formally in the minutes of the partnership meeting. The member should then agree formally with the partnership as to his/her involvement with matters associated with the declared interest.

4.2 If the interest inhibits the member's reasonable contribution for one meeting then he/she should not take part in that meeting.

4.3 If the interest inhibits the member's reasonable contribution in the longer term then he/she should withdraw from the partnership and should immediately advise his/her Political Group leader and the relevant Corporate Director. Another member should then be chosen to represent the Council on the partnership

4.4 Members must report any changes in personal circumstances that create a new or perceived conflict of interest to their Political Group Leader and the relevant Corporate Director.

4.5 Members must also discuss with the partnership any new issues of potential conflicts of interest or issues which impact on their role as a member of Shrewsbury and Atcham Borough Council. This is most likely to arise as a result of changes to the aims, constitution or position of the partnership that could be contrary to the public or the Council's interest.

4.6 An officer when working in a partnership should immediately declare any conflicts of interest or potential conflicts of interest that he/she may have or that may be perceived and request the partnership to record them formally in the minutes of the partnership meeting. The officer should then agree formally with the partnership as to his/her involvement with matters associated with the declared interest.

4.7 If the interest inhibits the officer's reasonable contribution for one meeting then he/she should not take part in that meeting.

4.8.1  If the interest inhibits the officer's reasonable contribution in the longer term then he/she should withdraw from the partnership and should immediately advise his/her line manager. Another officer should then be chosen to represent the Council on the partnership.

5. Provision of financial, technical or legal advice

5.1 Members should not provide financial, technical or legal advice to a partnership. Members should, however, satisfy themselves that such advice is available and is taken when necessary. They must ensure that the partnership arranges indemnity insurance as appropriate, details of which should be provided to Financial Services. 215.46

5.2 An officer will only provide advice to a partnership in those areas in which he/she has recognised expertise. Where there is uncertainty, the officer will check, in the first instance, with his/her line manager.

5.3 When an officer does provide financial, technical, legal or other advice to a partnership, a written copy of the advice should be made and a copy provided to his/her line Manager.

5.4  The Head of Finance, after being informed of a partnership involving members and/or officers, should raise relevant issues such as budgetary control and financial monitoring procedures and whether there are any VAT implications. Any agreement with a partnership to provide financial advice and support must be made after approval has been obtained from the Head of Finance.

Annex (I) - General guidance and advice about types of partnerships

General guidance and advice about types of partnerships

The structure of partnerships in which Members and officers become involved may differ from those described below, or it may change at different stages of evolvement or development. Members and officers may, however, observe common themes in each and if they are in any doubt should seek legal advice from the Assistant Council Manager/Monitoring Officer.

Types of Partnerships

(a) Town wide or strategic partnerships with no legal identity of their own.

These are partnerships only to the extent that a particular objective is given a project name and key organisations get together to agree a co-ordinated approach to achieve the objective and provided the working arrangement satisfies the criteria of paragraph 1.1. It will however be necessary to have a written agreement about whom "the partners" are and what they are going to contribute to the project. The Memorandum of Agreement between the partners will probably deal with the following issues:

• The name of the partnership
• Who the partners are
• The purpose/objective of the partnership
• What is to be contributed by each partner?
• The voting rights of members, chairmanship etc.,
• What administrative arrangements are agreed?
• What if any, financial arrangements are agreed?
• Legal liabilities of the partnership and individual partners
• Conflicts of interest
• How long the agreement is to last for?
• Are any insurance policies needed?

If the partnership enters into arrangements with third parties then vigilance must be exercised, e.g. when buying or entering into a building contract, or taking on staff.

Clarity is the key to avoiding disputes or unexpected liabilities so ask who is signing the building contract? The "partnership" has no legal identity of its own and so one or more of the partners must be prepared to put its name on the agreement and assume responsibility.

(b) Locality partnerships which want an identity of their own, and constituted voluntary groups and smaller community groups.

When forming this kind of group, there are six basic choices:

1. An unincorporated and loosely constituted association

2. An unincorporated but formally constituted association

3. A registered Charity

4. A charitable trust

5. A limited company

6. An Industrial and Provident Society

Legal advice should be sought before deciding which structure is most appropriate for your partnership. 215.48

1. An unincorporated and loosely constituted association needing only a very basic set of rules which may be entitled "constitution" to be adopted by all partners. These rules would often be limited to identifying little more than who the partners are and the aims and an outline of how the Association will manage itself.

Much care is needed when becoming involved with this type of partnership body. As the rules laid down are very basic the risks of disagreement and differing interpretations are ever present.

An unincorporated association of this type does not have a legal identity of its own. It cannot acquire property in its own name and individual members of the Management Committee can be held personally liable for the partnership’s obligations and debt.

2. An unincorporated but formally constituted association needing a more comprehensive set of rules laid down as a formal "constitution" to be adopted by all partners. This should include who the partners are, aims, powers and the voting/management procedures.

A formal and detailed constitution minimises the risk of differing interpretation and so minimises the scope for procedural disagreements.

An unincorporated association of this type does not have a legal identity if its own. It cannot acquire property in its own name and individual members of the Management Committee can be held personally liable for the partnership’s obligations and debt.

3. A Registered Charity needs a formal constitution that must meet the demanding minimum criteria laid down by the Charities Commission. Establishing a body as a Registered Charity is not a simple task and takes a significant amount of time; not all bodies will be deemed to qualify.

Registered Charities are administered by Trustees. Each Trustee must sign an undertaking to uphold the Charity’s objects (aims and objectives) above all else. Being a Trustee is a legally binding commitment and there is always the possibility that a person’s role as a Trustee may conflict with their role as a member or officer of a Local Authority. Do not accept the role of Trustee of a Charity without first discussing the personal implications with the Assistant Council Manager/Monitoring Officer.

Before taking on the role of Trustee the individual will normally be required to sign some form of undertaking to confirm they accept their responsibilities and duties. It is strongly recommended that all potential Trustees read the Charity Commission’s booklet CC3 "Responsibilities of Charity Trustees" before accepting this responsibility.

A registered Charity is a legal entity and may enter into a wide variety of contracts. The Trustees are responsible for the administration and execution of any contracts. Provided Trustees act within the guidance of the Charities Commission they are unlikely to be at personal risk but the Charity should, nevertheless, protect its Trustees with Professional Indemnity Insurance. Any Trustee who conducts themselves contrary to the requirements of the various elements of legislation covering charities, whether deliberately or inadvertently, could be liable financially and/or criminally. Being a Trustee is a demanding role, ensure you take advice before committing yourself.

4. A charitable trust may be formed where an individual or organisation wishes to donate money or property to be used for a specific charitable purpose into the future.

Such Trusts are established in the same way as outlined for registered Charities in 3. above and the responsibilities of Trustees are also the same. However, the constitution for the Trust must also include a section dedicated to detailing what funds will be used for and the manner in which the dispersal will be determined and managed.

Before taking on the role of Trustee the individual will normally be required to sign some form of undertaking to confirm they accept their responsibilities and duties. It is strongly recommended that all potential Trustees read the Charity Commission’s booklet CC3 "Responsibilities of Charity Trustees" before accepting this responsibility.

If a member/officer is considering becoming a Trustee of a Charitable Trust first seek the guidance of the Assistant Council Manager/Monitoring Officer.

5. Limited companies - Community or public body initiatives are sometimes formed as companies limited by guarantee. A limited company does have a legal identity of its own. It can buy or lease property in its own name. All members (usually termed "Directors") must guarantee to pay a nominal sum (usually £1) if the organisation runs into debt or has to be wound up.

There are strict rules for limited companies laid down by Companies House. If a member/officer is considering becoming a director of a limited company they should first seek the guidance of the Assistant Council Manager/Monitoring Officer.

6. Industrial and Provident Societies (IPSs) are incorporated and have a legal identity of their own. IPSs can buy or lease property in their own name. Registration is with the Registrar of Friendly Societies, but this can be a drawn out process. ISPs cannot register with the Charities Commission which can be disadvantageous, particularly in relation to tax.

If a member/officer is considering becoming involved with an IPS they should first seek the guidance of the Assistant Council Manager/Monitoring Officer.

Relationship with the Local Authority

All funding provided by Central Government or the European Union has to be administered by a statutory body such as a Local Authority. Even if the partnership has an identity of its own, it may still have some sort of relationship with the Council. For instance, the Council may be the accountable body and may hold some funding, such as ERDF monies. In this situation it is advisable to have a Memorandum of Agreement with the Council setting out the terms of the relationship, who is to do what and when, and what the expectations are.

If staff have been recruited to help with the work of the partnership, care must be taken to think through who will be the legal employer of the member of staff. Amongst other things this can have a direct relevance to pension rights.

If there is any doubt consult the Assistant Council Manager/Monitoring Officer. The advice is there to assist everyone connected with the Council. It rests with the individual to seek that advice.

Officers and members must always have at the back of their minds insurance, and whether the partnership needs it for its intended purposes.

To reiterate the foregoing, all officers and members are advised in all cases, to seek the advice of the Assistant Council Manager/Monitoring Officer before embarking upon work with partnerships.