Launch of MetroMOLA

[GPStone]

.......and I suspect I'm not 20 years older than you, unless you're despairing at the fact you won't be able to take Archaeology as one of your GCSEs in a few years! :p :face-kiss:

[Unitof1]

Yes meant to put in dinosaur

Gpstone- so if being a charity unit is exactly like being a non charity unit why be a charity unit?

[RedEarth]

No, on all counts. They're the same as you or I or any other kind of commercial company (with charitable status or not). They'll have an overdraft arrangement which right now they'll probably be taking full advantage of. While they have the access to credit provision they are as solvent as all the other companies that are currently having to operate on that basis. Accounts are interesting too. Quite a few of the larger companies/charities got well and truly flummoxed over the last financial year as a result of the new pensions regulations, and those that have sizeable pensions defecits got blown out of the water leading to the appearance of losses, regardless of their overal operating performance. That led to a few big deals falling apart and possibly contributed to some job losses (in a roundabout way) along with everything else, but wasn't something which could be foreseen.

I know relatively little about MoLA or MetroMoLA, but with regard to the way the big charities are set up, it isn't any different to normal non-charitable companies. Rather than being able to get away with something, however, they actually have extra-layers of regulations they have to comply to and which their accountants, their auditors and the charities commision keep track on, as well as having trustees overseeing things and being directly liable to the debts of the company should it trade as insolvent. Its not the charities you have to keep an eye on when it comes to trading and financial misdeeds as they have so much more regulatory tape, hoops and obligations to jump through and would get caught out pretty damn quickly, unless you believe a numerous and expansive range of accountancy professionals and various other professional monitoring types are guilty of simultaneously and independently turning a blind-eye and rich people are willing to put their own money on the line......oh, hang on......

Some of these charities must have incredibly generous banks, ones willing to provide an overdraft in the region of 25%-30% of their entire turnover. The best we could manage was considerably less than 10%. Something doesn't quite add up.

I don't believe the different types of company are the same at all... 80% Business Rates relief, strange rules relating to VAT I can't begin to understand, donations/services that you don't have to charge VAT on...

But hey, we are all supposed to be standing together in this time of woe, not bickering about the complex inequalities that possibly got us into some of this mess in the first place!

PS I also noticed on the MetroMOLA website that they are an IfA RAO (or is RO these days?). Not according to the IfA's website they ain't (although it may not have been updated yet, its that rapid service that you pay your membership for). MOLA(s) are, but they are a separate company with a separate company number and everything... so is it two for the price of one? God I'm feeling positive today!

[Unitof1]

Stop press -two men in a hand dug trench or class II charity steals a two man trench job from under the noses of a commercial archaeological company which made its name in the scottish parliament which was famous for its overspend.....

http://www.metromola.com/post.php?s=2011-03-18-metromola-central-excavation-in-herefords-jewish-quarter

where this charity mob once lived http://www.archaeologists.tv/content/view/5/44/

but are now apparently this

http://www.heraldscotland.com/business/corporate-sme/turning-culture-into-commerce-1.1021484

[SIZE=3]What could the Government do to help?

They could improve legislation that reinforces the importance of our heritage in law and presents archaeology as an essential part of the planning process.

A levelling of the playing field would also be most welcome. Currently commercial archaeological companies like Headland make substantial tax

contributions to the exchequer while charitable trust/local government units, who directly compete against us, neither pay tax on profits nor rates on property.

[/SIZE]
They are also in receipt of other concessions not available in the private sector.

[GPStone]

I'm not sure why you think it would require 25+% of turnover, RedEarth. I can't help you with that, but if its used in that way I suggested it amounts to a credit arrangement negotiated between a company and their bank, so could be anything depending on what both sides are prepared to do. The 10% mark sounds about right and works for most companies.

The point I'm trying to make is that, because someone doesn't understand the financial arrangement of a company of any type, it doesn't make it right or acceptable to cast aspertions on that company's finances. Its an unregulated marketplace with eveything that goes with that. If a company is a charity, it will normally have to fulfill a charitable aim and will be held to that by the charities commission and have to demonstrate its financial solvency through independently auditted accounts. It doesn't mean it stops functioning as a company if its a charity. It does, however, mean that it doesn't have shareholders creaming off any profit and if things get tight it doesn't have shareholders who can be used to inject cash into the company so operates in a stricter financial environment than non-charities.

As far as competition is concerned, charitable status is used by many companies to give them an edge. The important point to remember is that they will have to fufill charitable objectives if they are to be considered a charity with all the VAT allowances etc that come with it and will be monitored by the charities commission as to whether they do or not. If any other company feels that it can justify applying for charitable status to increase its commercial potential, and is willing to take on board the charitable aims and jump through the relevant hoops to get there, there's nothing stopping them. It is often the case that limited companies don't consider this to be worth it though, which is why they don't. Remember, when it comes to accounting, if there are issues with a company's finances they are more likely to be exposed or caught out if they are a charity than if they aren't. Is it possible that this puts some companies off applying for that status?

[GPStone]

Yes meant to put in dinosaur

Gpstone- so if being a charity unit is exactly like being a non charity unit why be a charity unit?

I'm referring to the ability to get credit and operate with an overdraft or credit facility, under which circumstances it is exactly the same.

The attractions are the charitable aspect - if you have charitable aims it makes sense. If you want to be able to acquire greater tax allowances etc and are willing to fulfill charitable aims, it makes sense (although you obviously have to a have a not-for-profit system which includes reinvestment in the company and or charitable aims, a board of trustees and no shareholders or ownership issues).

I agree that it has the potential to skew the market and competition, but not to a particularly great extent if you consider that there is also an element of evolution to the marketplace with companies naturally growing and absorbing others or, unfortunately putting them out of business (its not nice, but its the same as any other competitive market environment). Its equally possible to grow to big and exceed your potential market share, leading to you undermining your own business and going bust if the market shrinks, which it has done and we've subsequently seen all of the big companies getting into difficulty. At the end of the day, commercial competition is what it is. You can disagree with the system (and often I do), but I find it hard to disagree with a group of people's right to operate in a pre-existing system. if you choose to do that then you are automatically subject to everything that comes with it.

[Unitof1]

do charity units need any archaeologists in them

[RedEarth]

I'm not sure why you think it would require 25+% of turnover, RedEarth. I can't help you with that, but if its used in that way I suggested it amounts to a credit arrangement negotiated between a company and their bank, so could be anything depending on what both sides are prepared to do. The 10% mark sounds about right and works for most companies.

The point I'm trying to make is that, because someone doesn't understand the financial arrangement of a company of any type, it doesn't make it right or acceptable to cast aspertions on that company's finances. Its an unregulated marketplace with eveything that goes with that. If a company is a charity, it will normally have to fulfill a charitable aim and will be held to that by the charities commission and have to demonstrate its financial solvency through independently auditted accounts. It doesn't mean it stops functioning as a company if its a charity. It does, however, mean that it doesn't have shareholders creaming off any profit and if things get tight it doesn't have shareholders who can be used to inject cash into the company so operates in a stricter financial environment than non-charities.

As far as competition is concerned, charitable status is used by many companies to give them an edge. The important point to remember is that they will have to fufill charitable objectives if they are to be considered a charity with all the VAT allowances etc that come with it and will be monitored by the charities commission as to whether they do or not. If any other company feels that it can justify applying for charitable status to increase its commercial potential, and is willing to take on board the charitable aims and jump through the relevant hoops to get there, there's nothing stopping them. It is often the case that limited companies don't consider this to be worth it though, which is why they don't. Remember, when it comes to accounting, if there are issues with a company's finances they are more likely to be exposed or caught out if they are a charity than if they aren't. Is it possible that this puts some companies off applying for that status?

Here's some approximate and simplified figures from an imaginary archaeological charity's accounts - turns over ?400,000 spends ?500,000 = overspend of ?100,000. ?100,000 is, I believe, 25% of ?400,000 hence in order to remain solvent it needs to have credit/overdraft/whatever amounting 25% of its turnover. A bank is unlikely to give you that - certainly if you went to them with that as a business plan they would throw you out the door.

I may not understand in detail the accounts of a given company (how could I without access to them all) but I can do basic maths. Of course charities have to provide audited accounts, but so do private companies, and insolvency can affect them both the same. Charities just seem to be able to perform amazing feats of accounting. I was involved in a very small charity some time back, until I realised how badly organised it was, and it was in a state of virtual insolvency from beginning to end with the hilariously titled 'commercial' arm constantly bailed out by the (tax free) donations given to the charity. Were it's accounts audited every year? Yes. Did the Charity Commission close it down? No. I'm not saying this goes on in any any archaeological organisation, but the differences between a company that is part of a charity and a company that is just a company are, I would suggest, far greater than you would like to believe. It sounds a bit like you're justifying the 'competative edge' being a charity might give - I don't care about that, what concerns me is when it potentially leads to unfair advantages that force non-charities to cut costs further to win work and thus struggle to make an decent income, can't increase wages, can't improve conditions etc etc. If all archaeological work carried out by competative tender was carried out by organisations that were essentially run in the same way then it wouldn't really matter. It's the competation part that's a bit tricky. And don't be fooled by the notion that profits (profits! Hilarious) are creamed off by greedy director's in the case of private companies - since director's salaries are not necessarily fixed that is likely how they get paid. If there is a bad year it might be directors putting their money in to keep it going.

I'm not sure about companies becoming charities - is that even possible? If it were set up by a bunch of directors it would then need a board of trustees who were willing to support its mems and arts and didn't think there was anything dodgy about the directors continuing to get paid. That would be the major stumbling block, not the fact that you would get audited. Most of these things were presumably set up the other way round.

[GPStone]

Ok, Unit first. You might well see a difference in price but it wouldn't necessarily have anything to do with it being a charity as much as the actual financial capability of the company and the local competition. I've worked on enough jobs where I've been working for a large archaeology charity/company where they've won the job while tendering at a higher price because of they're ability to carry the financial risk. I've also worked for non-charities and not won tenders on the same basis or visa versa on both counts. It will depend on the capability of the company, not what it is and companies may take the opportunity to use loss-leading tactics like doing DBAs for free on the proviso that they'll be considered for any follow-on work because they can carry the financial risk. That has everything to do with the health of their accounts but not necessarily their status (unless they're incorperating odd aspects like substituting paid 'pros' with volunteers which is ethically dubious in the extreme and becomes complicated but might look good in light of community commitments etc).

RedEarth: You're quite right, that does sound very strange on the face of it. I assume any real example you may be alluding to features substantially higher figures than that but based on that, yes, I don't understand it unless the 25% is accounted for in something like a pensions defecit. In that instance it obviously wouldn't amount to an operating cost (hence wouldn't require paying) but its simply offset against the accounts so appears as a loss.

------If the ?400k figure is a real one then I might be getting what you're hinting at and if it is the situation I'm thinking of (and have perhaps alluded to in a previous paragraph) then its essentially to do with subsidising a commercial arm with a different aspect of commercial operation, all of which falls under a charitable status of one kind or another. Its also pretty unique to that situation and I personally don't like it at all but not because its a charity as such......but then we might be talking at completely cross purposes here. Message me if you like.------

I might add that I'm not suggesting profits are creamed off by greedy directors, but they can be if the said directors want regardless of the reasonable obligations to anyone else, up to the point of their ability to pay debts. As for competative tendering environments and similar markets, the difference in the way companies operate is often what allows them to make money in otherwise unforgiving markets and that includes using charitable status. Sure, if everyone was the same and operated in the same way (and was able to operate in the same way) without exploiting niches and other aspects or assets, it would be much simpler, there would probably be fewer companies, higher pay as a result of the fewer companies allbeit with less archaeologists working in the sector as a whole (perhaps with lower unemployment as a result of that)........or some other combination of those and other factors. But that isn't the case.

As for charities undertaking dodgy financial deeds - the regulations prevent them from doing so or at least should do. If they are still doing that and the regulations are not being enforced, report them to the charities commission. I'm not saying companies and charities don't flout the rules, I'm saying their charitable status is not what allows them to do it and doesn't really give them more leeway beyond the obvious tax breaks in return for charitable work (in theory). There is also an ultimate comeback which is the auditting system and allows the charities commission (either of their own accord or when prompted by a third party) to monitor and assess the financial state of the company. if you think there is something to raise with them, do it.

My original point was more about the way we see big companies and big charities operating in archaeology and whether it is fair to label them negatively in the way that many people do. The reality is that the negative aspects of working in this market are often determined by either the parameters of the market itself or issues attributable to a range of companies that work in it, not simply big charitable trusts. I still think that is the case. The big independents contribute to the problems with standards, wages and Ts&Cs as much as the charities and the smaller ones. There are some parameters and some things about this market that we can dismiss as being bad to the cows come home but won't achieve anything by it. If we want to improve things we have to do it within those parameters or completely outside of them. Unfortunately, that doesn't help small independents and one or two-man-bands who simply have to find a niche or flex there way into any gaps available with the risk being loaded entirely onto themselves. Unfortunately, that's the way the economics of this industry, like many others, work.

[Unitof1]

[SIZE=3]My original point was more about the way we see big companies and big charities operating in archaeology and whether it is fair to label them negatively in the way that many people do.

[/SIZE]
Virtually all the charities were set up as the big fish in their ponds. They were set up well before private companies. They set the so called market price which it never was. At the same time they gave the major impression that archaeologists are charity workers and possibly worst of all attracted people who wanted to work in such an environment. (lets call them the legacy).

Right now we are ?hopefully? witnessing the collapse of the charity system. I do mean that with all respect to those who are losing their current jobs. But the charity units as the big units are far from over in the currently diminishing pond and archaeologists are far from over fighting for their status within any organisation private included. Unfortunately the charity units were the most outrageous in their exploitation of archaeologists and archaeology and set the standard which private units can only have undercut for work. If it was a level playing field an archaeologist would surely work for a charity unit because as it is not a profit making organisation all that lovely profit should have gone to the archaeologist because it would be a charity for the archaeologist but they didn?t. Who knows what it was wasted on. The great fat controllers pet projects or meetings with fellow service providers to discuss council business or national policy. Must be 15 years since I was at Exeter.