Our legal status
When Suffolk Libraries was originally formed, it was an Industrial and Provident Society which was a type of mutual society that was used for organisations that typically operated as a co-operative. The legal entity Industrial and Provident Society ceased to exist in 2014 at which point Suffolk Libraries became a registered society under the Co-operative and Community Benefit Societies Act 2014. Suffolk Libraries is also a registered mutual society.
The transition of Suffolk Libraries from an IPS to a mutual society did not result in the creation of a new governance document. The Industrial and Provident Society ceased as a legal entity, and those organisations with that structure became mutual societies. There was no change to our registration with Companies House, nor with the Financial Conduct Authority. The rules document that is on our website is still the relevant governing document. So, although the status of Suffolk Libraries changed in 2014, this did not involve a significant overhaul in the way that the organisation operates and is governed and did not involve the creation of a whole new set of rules. In had no impact on our member groups.
It’s important to note the official name of the organisation did not change – it has remained Suffolk’s Libraries IPS Limited even though we aren’t an IPS. Changing the official name would have involved a significant amount of work. It also didn’t need to change as we always refer to ourselves as ‘Suffolk Libraries’ anyway.
What does membership involve?
When community groups were formed back in 2012 / 2013, they all signed up as ‘members’ of Suffolk Libraries. There was a document which included ‘membership criteria’ and ‘co-operative principles’ that every group signed up to. These are the same documents that we are trying to get all of the current trustees of our member groups to familiarise themselves at the moment.
The membership (ie. the community groups) has two main responsibilities in the governance of Suffolk Libraries.
1) To elect the board. There are 7 board members who are elected by the membership, from the membership. At each AGM, the two longest serving board members must stand down, but can stand for re-election. No board member can stand for election beyond the ninth Annual General Meeting after their appointment.
2) To vote on extra-ordinary resolutions. From time to time, there will be extra-ordinary resolutions on which the membership is required to vote. Since Suffolk Libraries was formed, this has occurred on three occasions when the board has decided to make a change to the society rules. Most recently, this was the addition of a clause to allow the board to co-opt young board members.
Membership of Suffolk Libraries does not involve anything for member groups beyond what is outlined in the co-operative principles and membership criteria documents that have been shared and the voting responsibilities outlined above. The membership is not involved in decisions relating to the running of Suffolk Libraries – that is what they elect the board to do on their behalf. They don’t have the power to oust board members – the board has a code of conduct to deal with any issues that might arise within board members. The membership only has the power to elect board members.
The board election process and the make up of the board
The 44 community groups are the only voting members of the society, each having 1 vote. At each AGM, there will be at least two elected board member vacancies. We appeal for members of member groups to stand for the vacant positions and an election takes place at the AGM to fill those positions. (Note that the trustees of a community group can nominate a member of their group who is not a trustee to stand for the board – nominees don’t have to be trustees). Sometimes the number of candidates is the same or less than the number of vacancies, in which case there is no need for a vote – this happened at the last AGM. Where there is a vote, each member group has one vote and therefore has to make a collective decision as to how to vote, which would typically be discussed and agreed at a trustee meeting.
Regarding the make-up of the board, there are a number of additional board members that have been co-opted because of their skills in certain areas and to increase the diversity of the board. Details of the current board member are at this link: https://www.suffolklibraries.co.uk/about/legal-information/board-members
There is scope within the Suffolk Libraries rules for the board to appoint other members to the society beyond the 44 community member groups. Within the rules it states that the board can appoint as a member, “any corporate body or an unincorporated body, firm or partnership that support the objects of the Society and that wish to engage with the services provided by the society”. When the society was formed, the original board wanted to build in an element of flexibility as to who could be appointed members. They didn’t know how things would develop and were perhaps unsure whether we would have member groups signed up for all 44 libraries, so this clause gave scope to appoint members beyond those library groups. However, this has never happened – the only members are the 44 community groups and the possibility of appointing members beyond the 44 community groups is not something that has been discussed or considered since Suffolk Libraries was formed.
Are member groups – and the trustees of those groups – financially liable for Suffolk Libraries?
There has been a question about whether members are financially liable for Suffolk Libraries. When groups were formed, each one paid £1 for a share in Suffolk Libraries with that being the limit of liability that each group had for the organisation. That was included within the original membership criteria document back in 2012. To clarify, in the unlikely event that Suffolk Libraries was wound up with significant financial losses, the member groups would not be liable to cover those losses – that £1 share is the limit of their liability. There was a question in the meeting about the individual trustees of community groups potentially being financially liable in such circumstances – but the individual trustees aren’t members of Suffolk Libraries (it’s the groups that are the members) and they have no responsibility as individuals for the organisation – so they couldn’t be held financially liable.
Communicating with the membership about votes of the membership
When electing board members or voting on in respect of an extraordinary resolution. We will email all of the community group trustees on our database about such votes, and it is the secretary who will be responsible for casting each group’s vote – unless the group informs us that another trustee is fulfilling that role. We will ensure that a full explanation is provide in this correspondence about what the vote relates to.
(Note that in the past, we’ve sent a paper letter to every group (one per group) regarding such votes – and each group has had to let us know which trustee is going to cast their vote on their behalf (their nominated rep). This will no longer be the case.)
With the Suffolk Libraries contract up for renewal soon, what would happen to the current structure and the membership arrangements if another organisation were awarded the contract?
Suffolk Libraries was awarded a ten-year contact by SCC to run the library service in 2022 so the contract is due for renewal in August 2022. We hope to have some news for you on the situation regarding the expiry of that contact soon.
The reality is, we don’t know what would happen to the membership arrangements if the contract was awarded to another company. It might be that SCC would stipulate that any organisation taking over the running of the service will be required to maintain a membership structure. However, they might not – and if they don’t, and the contract was awarded to an organisation that opted for an alternative structure, then community groups would likely cease to be members of Suffolk Libraries. That’s not to say that the groups would cease to exist because there would still be volunteers who want to help and support their local library, whatever structure the organisation takes – it’s just there wouldn’t be the community ownership and there wouldn’t be a board made up of elected community group trustees.
But we are talking hypothetically – we don’t know what’s going to happen and we would hope that Suffolk Libraries is in a very strong position to win the contract anyway!
Financial liability of community group trustees for their group’s activities
Firstly, Suffolk Libraries public liability insurance covers the activities of community groups. So, if any member group is running an event or activity and your negligence results in injury to someone or damage to someone’s property and they pursue a claim against you, our public liability insurance would step in. I’ve attached the insurance confirmation to this email to confirm that.
However, another question which is often asked is about whether the trustees of community groups have any kind of financial liability in respect of the running of the group. Trustees of CIOs do not – the liability is borne by the group.
However, for unincorporated charitable associations (formerly known as small unincorporated charities) – which most of our community groups are – the trustees technically have financially liability for community group expenses in a situation where the group does not have the funds to pay them. This will, of course, be concerning to some people, but hopefully we can give you some reassurance on this point.
Firstly, it’s worth considering the kind of scenarios where a group could actually find themselves liable to pay for something for which they don’t have the funds. As long as groups manage their finances properly and follow the correct procedures, they are unlikely to encounter such a scenario. However, one thing that could happen would be if a group has a trustee who is ‘dodgy’. Even with financial procedures in place, it’s impossible to be 100% safe. So, a scenario that could arise is that a group is awarded a grant to pay for something or complete a project and a trustee somehow steals money from their bank account leaving them without the funds to complete the project – even though the funder still expects them to do so. This has happened on one occasion since Suffolk Libraries was formed when a trustee stole over £10,000 from the community group’s bank account. Suffolk Libraries stepped in and lent the group the funds required to enable them to complete a project for which they had received funding, and the group repaid that to Suffolk Libraries over a period of time.
We can’t say definitively what would happen in future situations because no two situations are the same. However, what we can say is that, in the unlikely event that a community group that’s an unincorporated charitable association has money stolen from their bank account and are unable to fulfil financial commitments as a result, Suffolk Libraries would help them out and – most importantly – we would avoid a situation where individual trustees are having to foot the cost out of their own money. As well as not wanting you to have to pay money out of your own money, the reputational damage to Suffolk Libraries if we allowed this to happen without stepping in could be significant.