Contact: David Wilson, ext 7407

1. Introduction

1.1 Under the Charities Act 1993, every charity must produce an annual report on its activities and produce statements of account. These must be filed with the Charity Commission within ten months of the end of the charity's financial year. Charities with income under £10,000 a year need only file summary reports and accounts with the Commission by completing standard forms. Larger charities must file a fuller annual report and accounts.

1.2 There are seven charities registered with the Charity Commission for which the County Council acts as sole trustee, and which are under the remit of the Executive Member (Policy and Resources):

· The Michael Austin Harlick Trust Fund

· The Dayas Music Scholarship Trust Fund

· The Hampshire Mentally Handicapped Persons' Holiday Organisation

· The T Houghton Trust

· The Mace Educational Trust

· The Portal Prize Fund

· The Spitfire Mitchell Memorial Fund.

2. Michael Austin Harlick Trust Fund - annual report

2.1 Only the Michael Austin Harlick Trust Fund receives annual income in excess of £10,000. A draft annual report for approval is attached at Appendix 1. The accounts and balance sheet are attached at Appendix 2A.

2.2 Michael Austin Harlick was an ex-prisoner of war from Gosport who established a trust in his will to be used for the provision of medals, challenge cups and trophies for the children of Hampshire schools, and for the encouragement of pupils in all forms of sporting activity.

2.3 The trust is invested in a mix of managed unit trusts established for charities in line with the County Council's investment policy for trust funds agreed by the former Charities Panel in July 1998. The Charibond and Charinco funds are both invested in a range of fixed-interest and index-linked bonds, which produce a relatively high income yield. The investment in Charifund gives the trust exposure to equities, which produce a lower yield but provide scope for growth in the trust's capital. This should produce a rising level of income over the long term.

2.4 The accounts show the trust to be in a healthy position, with expenditure contained well within its income, and the value of its investments well in excess of their book cost.

3. Smaller trusts

3.1 Accounts for the six smaller trusts are attached at Appendices 2B-2G. Brief comments on the affairs of each trust are set out below.

Dayas Music Scholarship Trust Fund

3.2 Although the County Council is sole trustee, this trust is administered by the Hampshire Music Service in consultation with the Director of Children's Services, County Treasurer, Chief Executive and County Music Adviser.

3.3 It was established in 1978 under the will of Mary Gwendolyn Sayer Hayton (nee Dayas). It provides music scholarships, preferably, but not necessarily, for pianoforte, for applicants living in Hampshire.

3.4 Accounts for the trust are shown at Appendix 2B. It is invested in a mix of investments in line with the County Council's policy. After two years of over-expenditure in 2002/03 and 2003/04, payments in 2004/05 were well within the trust's income for the year. The trust's balance sheet remains healthy, with investment valued substantially in excess of book cost.

Hampshire Mentally Handicapped Persons' Holidays Organisation

3.5 This trust is administered by the Adults' Social Care and County Treasurer's Departments. It is used when required to improve the holiday accommodation facilities for adults with mental disabilities at Orchard Close in Hayling Island.

3.6 The accounts are attached at Appendix 2C. The funds are held entirely on deposit with the County Council, as the demands on the trust have proved to be unpredictable. Interest is paid on the deposit at National Westminster Bank base rate less 1%. Arrangements are being put in place to put the administration of this trust on a more formalised basis with regular meetings between representative `managing trustees'.

The T. Houghton Trust

3.7 This trust is available for use by Perins School, New Alresford, for the provision of prizes to pupils.

3.8 Accounts for the trust are attached at Appendix 2D. It has been relatively little used, so it partly invested in Charinco, a bond-based unit trust. The remainder is invested on deposit with the County Council. This is in line with the County Council's policy for funds which are used irregularly, where the prime objective is to maintain their real capital value and income.

The Mace Educational Trust

3.9 This Trust was established in 2000 under the will of Evelyn Mace. Income to the Trust is used for the provision of scholarships for higher education for students under 25 who are, or have been, in the care of Hampshire County Council.

3.10 Accounts for the Trust are shown at Appendix 2E. It is administered in the County Treasurer's Department, although all grants made have been subject to the specific approval of the Executive Member - Policy and Resources.

3.11 It is invested in line with the County Council's policy for the investment of trust funds, with 25% invested in a share-based unit trust (Charifund) and the remainder in a bond-based trust (Charibond).

The Portal Prize Fund

3.12 The Portal Prize Fund was established in 1944. A revised scheme was agreed by the Charity Commission in 1970, and its primary objective is the promotion of a wider knowledge of Commonwealth countries amongst secondary school pupils in Hampshire.

3.13 Accounts for the Fund are shown at Appendix 2F. During the 1990s, considerable use was made of this trust following concerted action by the Chief Executive and County Treasurer to make schools aware of its availability. However, in the last five or so years it has fallen back into disuse. Its income is very small at only £383 in 2004/05. It is mainly invested in bond-based charitable unit trusts, with the balance held on deposit with the County Council.

The Spitfire Mitchell Memorial Fund

3.14 This Fund was established by the designer of the Spitfire aircraft, who had connections with Southampton. Income to the Fund can be used for the provision of scholarships in aeronautics and engineering for students at Southampton University.

3.15 The accounts are attached at Appendix 2G. The last payments were made to the University from the Fund in 2000/01. Since then, the University has failed to make any nominations for the awards.

3.16 Discussions have been held on a number of occasions between the Chief Executive and Southampton University with a view to transferring responsibility for the Fund to the University as its main user. However, these discussions have not yet been concluded.

3.17 It is invested in bond-based unit trusts, with the balance held on deposit with the County Council.

Recommendation

1 That the status of the charities for which the County Council acts as sole trustee be approved and that their accounts be approved for submission to the Charity Commission.

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

Published works.

Documents which disclose exempt or confidential information as defined in the Act.

TITLE FILE

None.

ANNUAL REPORT OF THE MICHAEL AUSTIN HARLICK MEMORIAL FUND FOR YEAR 1 APRIL 2004 TO 31 MARCH 2005

1. Charity Name

The Michael Austin Harlick Memorial Fund

2. Any other name the Charity is known by

None

3. Charity Commission Registered Number

900351

4. Financial Year

This report is the for Financial Year beginning on 1 April 2004 and ending on 31 March 2005.

5. Charity's Principal Address

The Chief Executive, Hampshire County Council, The Castle, Winchester, Hampshire, SO23 8UJ.

6. Governing Document

The Charity was constituted by the will dated 12 May 1971 of the late Michael Austin Harlick, proved at Winchester on 24 November 1988, as amended by a scheme of the Charity Commission dated 11 January 1990.

7. Objects of the Charity

Under the terms of the late Mr. Harlick's will, his estate was given to Hampshire County Council as trustee to establish the "Michael Austin Harlick Memorial Fund". The income from the fund was to be used for the provision of medals, challenge cups and trophies for the children of Hampshire schools for the encouragement of pupils in all forms of sporting activity. By virtue of the Charity Commission's scheme dated 11 January 1990, the objects of the Charity were widened to include the revision that, if in any year the income shall not be required for the provision of medals, challenge cups and trophies, the Trustee shall apply the unused income in otherwise promoting the physical and recreational education of children attending schools in the county of Hampshire.

8. Specific Investment Powers

The Trustee has full power for the investment of funds for a period not exceeding 21 years from 1 January 1992, including the investment of any balance not needed for working purposes.

9. Solicitor

Mr P.C.B. Robertson, Chief Executive, Hampshire County Council, The Castle, Winchester, SO23 8UJ.

10. Bankers

National Westminster Bank plc, 105 High Street, Winchester, Hampshire, SO23 9BU.

11. Treasurer/Financial Adviser

Mr. J. C. Pittam, County Treasurer, Hampshire County Council, The Castle, Winchester, Hampshire, SO23 8UJ.

12. Name of Trustee

Hampshire County Council.

13. Trustee Selection Method

Hampshire County Council has been appointed sole Trustee under the terms of the will of the late Michael Austin Harlick dated 12 May 1971.

14. Custodian Trustees

None

15. Activities and Achievements

Awards totalling £9,027 have been made to individuals and sporting organisations in support of the Charity's objects. Efforts have been made to spread the awards across a broad range of sports, in support of the development of young sportsmen and sportswomen.

16. Reserves Policy

The reserves are retained and invested in managed pooled charitable investment funds, with a cash float held on deposit with Hampshire County Council. The income is used to fund grants set against the criteria of the Trust.

17. Grant Making Policy

Grants are made on terms that satisfy the terms of the trust.

18. Investments Selection Policy

The majority of investments are placed in managed fixed interest-based pooled funds to generate a secure income and preserve the Trust's capital value. A much smaller portion is invested in equity-based pooled funds to provide capital growth over the longer term.

19. Review of Major Risks

The Trustee has assessed the major risks to which the Trust is exposed, in particular those relating to the finances of the Trust, and is satisfied that systems are in place to mitigate exposure to major risk.

20. Declaration

I declare, in my capacity as Charity Trustee, that the Trustee has approved the report above, and has authorised me to sign it on the Trustee's behalf.

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