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Dissolution Of Pre-school And Redundancy


mps09
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Hi all,

 

I wonder if someone can help.

 

If a pre-school was to close and had insufficient assets to cover redundancy payments... are the committee members still personally responsible.

 

I had thought this had changed but I can't find any information about it - the PSLA constitution doesn't make it clear what would happen if there weren't any/insufficient funds left after debts were cleared.

 

Does anyone know where I can read more?

 

Many thanks,

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thanks for your speedy replies!

 

this hasn't actually happened but a friend mentioned that she is having trouble recuiting committee members not because of finding interested parents but because as soon she tells them they would be personally responsible for paying any redundancy money they don't want to commit - and who would blame them :o

 

We don't tell our parent committee this and I just wanted to find out more.

 

Thanks again.

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Yes under standard PSLA one they are liable.. but think there is a way so they are not.. we never checked it as we used to have a pot of money earmarked just for this.. enough to cover all redundancy coats.. never touched even when in dire financial need.. as it really was the only way we could get committee members..

 

the amount fluctuated each year depending on staff there, and how much they would be due.. we checked once a year and added more if needed and noted if we had a surplus in the account in case we needed it..

 

Charity commission were happy for us to keep this amount in an account and we had a note why in our end of yesr report whioch we sent to them..

 

Inge

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Hi if you are a member of PSLA then i would suggest that a committee member of that group contacts them as a matter of urgency. They are there to guide committees but will only speak to an officer if its anything of a legal nature.

Also if you have a Development Worker from the PSLA they should be able to assist you.

We have been fortunate through prudent fundraising and savings managed to have an account specifically for this very reason and it is never touched, it's called our contingency fund.

I think many pre-schools are now looking to become an incorporated company with charitable status as it protects the trustees more than Trustee indemnity insurance.

Hoping your friend gets the advice she needs.

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I understand that we should have a reserve policy which states what money held in reserve is for such as redundancy, and what you would do if money went over or under a set amount. Can you make it a target to build up a reserve to cover redundancy? You can calculate what this would be using the governement website, HMRC, there's a redundancy calculator on there.

 

You can also get indemnity insurance for trustees and committee members through the PLSA. Can't remember exactly what this covers but we have it. I'm sure you would still need to have money in reserve for redundancy. Of course the setting could always sell their stock to cover some costs. Though if setting's have their own building like we did and do, you might have to have the funds to remove the building (portacabin) from the site too if that became necessary.

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Hi, we have insurance which in theory covers us so we are not liable for preschool debts.

 

I have also calculated reserve and written a policy which outlines how this is done. This is following some stuff I read on the charity commission website about reserves (ironically we were holding too much of a reserve which is equally bad practice as having too little). A charity must use the money it raises to benefit those it is raising money for.

 

Here's our reserves policy which outlines the calculations, I got the redundancy info from ACAS who were very helpful.

 

Reserves_Policy_minus_names.doc

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Just to add, unless you are employing lots of full time staff who have been there for years and years, your redundancy costs are probably not as big as you might think. I added in a contingency and also the year's hall rental, even though we probably wouldn't need those if it came to it.

 

Hope that helps your friend.

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