Q&As

Does a county council have the power to pay any short fall on business rates for a community group running a library if they are registered as a charity?

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Published on LexisPSL on 05/05/2016

The following Local Government Q&A provides comprehensive and up to date legal information covering:

  • Does a county council have the power to pay any short fall on business rates for a community group running a library if they are registered as a charity?

We refer you to our Practice Note: , which outlines what constitutes a ‘social enterprise’. According to the government, a ‘social enterprise’ is:

'a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.'

Local authorities (LAs) have used a range of legal powers to promote and support social enterprises. The principal legislation used has evolved significantly over the last 40 years.

In the early 1970s, section 111 of the Local Government Act 1972 (LGA 1972) together with section 19(3) of the Local Authority (Miscellaneous Provisions) Act 1976 (LA(MP)A 1976) allowed local authorities wide powers to provide grant funding to recreational facilities within or outside their area. Further expansion took place in the early 2000s—section 1 of the Local Government Act 2000 (LGA 2000) introduced the concept of well being, which could be used to facilitate the promotion of social enterprises. Arguably the most significant change has been brought about by section 1 of the Localism Act 2011 (LA 2011) which introduced the general power of competence, allowing much greater freedom and flexibility to innovate and encourage alternative ways of working including social enterprises.

Opting to change the status of a social enterprise to

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