Trust Money

One of the Highbury Trust issues has to do with money that could have been collected from the Council for its use of Highbury properties, and which could have gone into upkeep and restoration projects. The response to this point has been that the Council have also been paying for the upkeep of the Hall. The Council Business Management Committee says as much in the statements below, taken from the minutes of a 23/03/2004 meeting. First, the claim that the Council have subsidised the Trust:

4.2 (Legal, Financial and Management Implications) If information comes to light which leads the Charity Commission to believe that the Council has benefited from its use of the Highbury Trust assets then the Trust will have to be duly compensated for any loss. However, by way of some comfort, the KPMG report advised that:

“…on balance, given the expenditure incurred on managing and maintaining the assets, the Council makes a net loss. This loss would have been substantially higher if it were to be assumed that the Council had run Highbury Hall primarily for charitable purposes”.

Then the recognition that back rent may be due:

6.3 (Resource Implications) If Social Care and Health wish to continue to occupy Chamberlain House for the immediate future, therefore, a commercial rent of approximately £117,000 per year would need to be paid to the Trust.

and

6.5 If the Directorate of Local Services (Environmental Services) wishes to continue to occupy Highbury Hall on a commercial basis, then a market rent of approximately £71,000 per year will need to be paid to the Trust.

These figures are based on estimates of both the costs incurred and the presumed rental value of the properties. The costs incurred seem to come from an incomplete record, but if the 2003 KPMG report is taken as a guide, outgoings have been fractionally higher than the income that could have been collected.

But where’s the evidence to show that this is correct? A brief look at the figures provided leaves some doubt as to the credibility of that conclusion, partly on the basis of unproven expenses, and partly from what looks like inflated costs.

The income could have included nearly £200,000 annually from the combination of Highbury Hall and Chamberlain House (using KPMG figures), leaving aside rent from the domestic properties and maybe the Four Seasons project. This should be set against money spent by the Council on maintenance and repairs (excluding management costs for Council activities), but this amount seems to have been relatively small at about £50,000 per annum, plus capital projects such as the £700,000 spent on renovation in 1984.

Absent a full record of expenditures, it seems that costs have been inflated by adding in the cost of managing Highbury Park, the Four Seasons, and maybe even Highbury Hall activities. If this is the case, and the projected income exceeds the legitimate outgoings by double or quadruple figures, then the potential income would cover both maintenance and restoration, and the Council has no basis for selling the properties.

We don’t have clear answers to the questions about income and expenditure, and it may be that the Council have not done the necessary accounting over the decades. Likewise, the figures I’ve found may have to be modified if I come across more detail somewhere. Without a clear accounting, nobody can make proof-positive claims one way or another. But if the Council cannot prove it spent the money or has spent the money on things that should come from different budgets, yet is liable for back rent, the claim that expenses are higher than income rings hollow. More importantly for the future of the Hall and gardens, the plan to sell some of the land for development loses any justification, since rent based on existing use looks sufficient to cover maintenance costs and more.

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