Debating the alternatives

Published Tuesday 23 March 2004 at 10:15

In the light of the forthcoming charities bill, I too would like to see a debate about how subsidised companies might be funded and, like AK Bennett-Hunter (Forum, March 4, page 9) and others, am constantly aware of the limitations of the available alternatives.

Aside from the crucial issue of trustee training and ongoing development, the issue of subsidised organisations being charities is, at least from a legal point of view, straightforward. There is no legal reason why arts organisations cannot be set up to be non-profit distributing with paid directors if desired. In principle government funding could be received though other funding would not - and that’s the rub. If organisations wish to have the benefits associated with being a charity, such as rates relief and tax reliefs, then they have to comply with all the rigours of charity law, including the Charity Commission SORP and being unable to pay trustees - a particular issue, given the threat to many of becoming VAT exempt under the Cultural Services directive. Given that there is no prospect of those benefits being extended to non-charity arts organisations, it is for the foreseeable future a simple choice.

Sean Egan

Solicitor

Bates, Wells & Braithwaite

Cheapside

London