Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report

1. Executive Summary

1.1. The purpose of this paper is to seek approval for the accounts of the Museums Trusts for 2008/09, as set out in Appendix 1 of the attached report.

2. Contextual information

2.1. The Executive Member for Culture and Communities acts as Trustee for the following:

· the Allen and Curtis Museum Foundation

· the Red House Foundation

· the Tasker Trust

· the Aldershot Military Historical Trust.

2.2. In addition, Mr Mark Breedon is a Trustee for the Allen and Curtis Museum Foundation. He has been sent a copy of this report.

2.3. By law, the Trustees are required to approve the annual accounts of the Trusts, which must then be sent to the Charity Commission. This includes the Tasker Trust and the Aldershot Military Historical Trust which do not hold any investments nor had any financial transactions during the year. The accounts for the year 2008/09 are attached at Appendix 1. These include the value of each Trust's investments at book cost. The recent market value of investments is shown, for information, in Appendix 2.

2.4. The various Trusts hold investments in a variety of managed funds, all geared to long term investment. These managed funds should spread risks, while giving access to professional investment management. The funds invested in have not been changed for a number of years as the transaction costs of selling units and reinvesting in other funds, added to the uncertainty of not finding a "better" performing fund, all argue against change. Section 3 below, indicates that the performance of the equity-based funds in 2008/09 was disappointing but this must be viewed in the context of the overall performance of investments. The trustees should continue to bear in mind the long-term nature of equity investment.

3. Finance

The Allen and Curtis Museum Foundation

3.1. The Foundation holds units in Charibond and Charifund.

3.2. Overall, the Allen and Curtis Museum Foundation's income rose by £94, or just over 2.4%, due to an increase in income from Charifund offset by a decrease in interest on cash balances.

3.3. Charibond is a fixed interest based fund, investing in UK Government bonds (gilts) and corporate bonds. It should provide a higher income than funds such as Charifund which is invested in equities and convertible stocks. As an equity-based fund, Charifund should provide capital growth and rising income over the longer term.

3.4. Charibond's income distribution remained unchanged from 2007/08 at 7.6p per share. The capital value per Charibond share fell during 2008/09, by 3.4%, from 119.1p per share in 2007/08 to 115.1p. This compared with a rise of 5.2% in Charibond's benchmark, the FTSE British Government All Stocks Index.

3.5. Charifund increased its income distribution from equities by 4.8%, from 71.2p per share in 2007/08 to 74.6p per share in 2008/09. The capital value of each Charifund share fell by 37.5% over the year, compared with a fall of 32.2% in the FTSE All Share Index. Charifund's portfolio is heavily weighted towards shares that provide a high income yield.

3.6. The reduced income from interest on cash balances reflects the large fall in average base rates between 2007/08 and 2008/09.

The Red House Foundation

3.7. The Red House Foundation's total income in 2008/09 rose by £170 or just over 3.5% compared with 2007/08. The main sources of income are Charibond, Charinco and Allianz RCM, which account for the majority of the increase during the year but this was offset by a decrease in interest on cash balances.

3.8. Charinco is another fixed interest fund. The distribution remained unchanged from 2007/08 at 10.0p per share. The capital value of each Charinco share rose by 0.8% compared with a rise of 5.2% in the FTSE British Government All Stocks Index.

3.9. The Allianz RCM UK Equity Fund aims to provide healthy capital growth over the very long term. In 2008/09, the capital value per share fell by 37.6%. This fall in value was more than the fall of 32.2% in the FTSE All Share Index but was similar to the Charifund holding held by the Allen and Curtis Museum Foundation. Allianz pursue a more adventurous growth-based investment style, which they believe will outperform over the long term. Income distribution growth this year was 9.9% on 2007/08 - a larger growth than the Charifund investment.

3.10. The Red House Foundation also holds smaller investments in three equity-based funds. The Aberdeen North American Unit Trust fell in capital value by 11.1%, the Aberdeen UK Growth Fund by 36.0% and the New Star Equity Trust Income units fell by 40.5%.

Flora Twort

3.11. The Trust's investments were transferred to Petersfield Museum on 16 January 2009, when ownership and management of the museum also transferred.

Red House Museum (Christchurch) Development Project

3.12. Last year, up to £85,000 was earmarked from the Red House Foundation investments to be used as match funding for a Heritage Lottery Fund (South West) bid to revitalise the museum. However, as can be seen in Appendix 2, the current valuation of the Red House Foundation's Investments has fallen to just over £74,000. A report on proposals at Red House Museum will be brought to a Decision meeting later in the year, and it is not envisaged that the investment will need to be realised until 2010/11 at the earliest .

4. Recommendation

4.1. That the accounts of the Museums Trusts for 2008/09, as set out in Appendix 1 are approved

CORPORATE OR LEGAL INFORMATION:

Links to the Corporate Strategy

IMPACT ASSESSMENTS:

1. Equalities Impact Assessment:

1.1. Not applicable

2. Impact on Crime and Disorder:

2.1. Not applicable

3. Climate Change:

a) How does what is being proposed impact on our carbon footprint / energy consumption?

Not applicable

b) How does what is being proposed consider the need to adapt to climate change, and be resilient to its longer term impacts?

Not applicable

The Allen and Curtis Museum Foundation

Income and Expenditure Account for the year ended 31 March 2009

The Allen and Curtis Museum Foundation

Balance Sheet as at 31 March 2009

The Red House Foundation

Income and Expenditure Account for the year ended 31 March 2009

The Red House Foundation

Balance Sheet as at 31 March 2009

The Flora Twort Trust

Income and Expenditure Account for the year ended 31 March 2009

The Flora Twort Trust

Balance Sheet as at 31 March 2009

Note: Ownership and management of The Flora Twort Trust transferred to Petersfield Museum Trust on 16 January 2009.

The Tasker Museum Trust *

Income and Expenditure Account for the year ended 31 March 2009

The Aldershot Military Historical Trust *

Income and Expenditure Account for the year ended 31 March 2009

The Museum Trusts Accounts

Market value of investments as at 11 June 2009