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Affinity Trust appoints independent pay committee

Governance | Tania Mason | 27 Oct 2009

The Affinity Trust, formerly TACT UK, is appointing an independent pay committee to determine how much its board members should be paid, while at the same time applying for charitable status.

The Trust, which supports people with learning disabilities in care homes and in the community, used to be an industrial and provident society (IPS), meaning it was exempt from registering with the Charity Commission.

But the advent of the Charities Act 2006 meant it could only stay exempt if it registered as a Registered Social Landlord and became regulated by the Homes and Communities Agency (formerly the Housing Corporation).  This requirement is due to come into force in late 2010.

At the time, the board of the Affinity Trust – which receives 85 per cent of its funding from local authorities - discussed its options and decided it should become a charity. So it has converted to a limited company with charitable purposes and submitted an application for charity registration. It is now in dialogue with the Charity Commission, which wanted some clarification about its objects.

Chief executive Leo Sowerby (pictured) told Charity News Alert: “To all intents and purposes we already operated as a charity, and nobody knows what an industrial and provident society is anyway – if anybody ever asked you’d have to spend five minutes explaining it.

“So we decided it would be better to be registered as a charity as this would give us a clearer status in the eyes of the public.”

But because as an IPS, the Trust had paid its board members, it would have to obtain permission from the Commission to continue doing so as a charity.  So it is setting up a panel of independent experts who will be retained to advise on appropriate annual increases.

According to the Trust’s 2008 annual review, the Trust spent 1 per cent of its £17.4m income on governance costs – a total of £174,000.  It has ten board members.

“It’s not about whether or not we will pay the trustees,” said Sowerby, “as we have paid our board members for nine years. But we have decided it is better from a governance point of view if their pay and annual increases are decided by an independent group.”

Sowerby said the Trust hoped the establishment of the panel would help persuade the Charity Commission of its commitment to good governance.

The independent panel will also be paid, but Sowerby expected that they would only meet for a few hours once a year.

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