Lloyds TSB foundations agree revised funding deal without Scottish arm

Fundraising | Gareth Jones | 16 Dec 2009

The three Lloyds TSB Foundations covering England and Wales, Northern Ireland and the Channel Islands have agreed to a renegotiated funding agreement with their principal benefactor the Lloyds Banking Group.

However the deal does not include the Lloyds TSB Foundation for Scotland, which becomes the only regional body that has not agreed to renegotiated terms, and as such will not receive funding until the Banking Group returns to profit.

Between 2010 and 2013 the foundations will receive funding at a higher level than they received in 2009, with the England and Wales region set for £25.2m in 2010.

After that period the foundations will jointly receive 0.5 per cent of Banking Group’s total profits each year, half the amount due under the previous covenant.

Earlier this month the Banking Group revealed it was considering the termination of its covenant with the Scottish foundation, which would mean the deal would cease in nine years time.

“Fairness and transparency”

Lord Leitch (pictured), deputy chairman of Lloyds Banking Group, said: “We are very pleased to have reached agreement on a new and expanded relationship which we believe will bring the Group and the foundations even closer together.

“We and the foundations subscribe to the view that the long term funding of programmes designed to tackle disadvantage is the right and appropriate focus for us both.”

Professor Ian Diamond, chair of the Lloyds TSB Foundation England and Wales, said on behalf of the three foundations:

“We have all been keen to ensure fairness and transparency with the key focus being on supporting the most disadvantaged groups in our society today.

“These principles have formed the basis for a successful conclusion of these negotiations.”

Scottish foundation to consult OSCR

Mary Craig, chief executive of the Lloyds TSB Foundation for Scotland, said the foundations will be expected to align a sizeable portion of their funds to the Group’s corporate giving priorities.

“Having already rejected the Group’s proposal on the grounds of legal and financial advice, the Foundation is now to seek a formal view from OSCR, the charities’ regulator in Scotland, for an opinion on the implications of an independent charitable organisation, such as ours, aligning a significant part of its income to a corporate giving programme.

“In effect, the Foundation wants to know whether our independent charitable status would still be intact under charities law."

Directory: Lloyds TSB Foundation for England and Wales

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