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Councils struggling to fund public services, such as residential homes for the elderly and art galleries, can ease the burden by turning them into charitable trusts, according to a report by London law firm Lawrence Graham.
The report, which was written by lawyers Simon Randall and Phillip Heath, says benefits of transferring services to a charitable body include:
exemption from VAT;
mandatory relief from 80 per cent of the national non domestic rates;
increased chances of National Lottery funding.
They say that while democratic control of a service may be lost once it is turned into a charitable trust, subsequent community involvement in the running of a trust is a significant advantage.
Randall said that by taking the charitable trust route councils can safeguard important amenities for years to come.