Royal British Legion does not know if it owns 93 properties

28 Jul 2017 News

The Royal British Legion has said that it does not know whether it owns 93 separate properties, in its most recent set of accounts.

The charity has a portfolio of more than 350 investment properties, mostly local branch trusts, which are held for the use of a local branch of the legion. The legion is currently carrying out an assessment of these properties.

It has recorded a £4.9m loss after discovering that "there is now uncertainty about whether the Legion has a beneficial interest in a number of local property trust properties in which it was thought previously to have had such an interest".

This affects 30 properties, but the legion also says it does not know whether it owns another 63 properties used by local branches.

"There are 93 branches where the ownership of properties is unclear and as there is uncertainty to the beneficial ownership of the property, no value has been attributed to these properties in the accounts," the charity said.

The charity had already sold a number of investment properties, but discovered some years ago that it was not allowed to treat money from the sale as unrestricted income. It has now announced it freed up £22.5m from these funds, allowing it to be spent as unrestricted money.

Another £6.4m has been made from the sale of 22 other properties.

The charity says this money will be used to support the Legion’s corporate strategy as well as helping it provide services to beneficiaries in a wider geographical area including the development and expansion of care homes.

The charity’s restricted branch property trust funds fell from £62.6m to £47.0m in the year ending September 2016.

Its accounts say: “There is a clear strategy for freeing up the remaining funds over the next two to three years, as well as proceeds from future sales if a property is no longer needed.”

The charity has an additional restricted investment property reserve, which fell from £69.0m to £61.5m.

Income down

The charity reported a £1.8m loss in its latest accounts, due to a six per cent drop in income and increased infrastructure investment.

For the year ending September 2016, the charity’s total income was £151.3m, compared with £160.9m the previous year.

The charity’s expenditure rose from £143.9m in 2015 to £146.9m, which it puts down to a heavy investment in infrastructure, including the delivery of a new finance system and revamping its IT platform.

The charity has a conservative reserves policy to cover six months’ unrestricted expenditure due to a perceived risk of its dependence on volunteer support and donations.

“Our biggest risk is that our income suddenly drops because of unforeseen factors beyond our control. In these circumstances, reserves would need to fund operating expenditure while the organisation was put back onto a stable footing.”

Unrestricted funds, excluding the functional fixed assets and programme related reserves, totalled £95.4m in 2016, up from £56.2m the previous year, representing nine months’ expenditure.

Around £75m is currently held in cash, the accounts show.

Women’s section

The charity says its plans to merge a volunteer body, the women’s section, back into the wider charity have stabilised following a rocky start.

Following the decision to merge, taken at a trustee board meeting in December 2015, a number of branches of the charity’s women's section dissolved in protest.

But in the latest accounts, the charity says it has now agreed a path forward.

“While it is acknowledged that the process got off to a difficult start, the commitment of those involved to a collaborative, open and transparent working relationship has resulted in an agreed path forward.

“The transition of the women’s section financial and grants administration functions into the Legion’s wider organisation has been completed successfully.”

 

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