John Lyon’s Charity seeks legal exemption in crucial High Court challenge to ensure £1.3million support isn’t pulled from low-income families in London
- John Lyon’s Charity seeks narrow exemption to protect £1.3 million grant-funding for children and young people’s groups
- Reforms have “unfair, unacceptable, and unsustainable” unintended consequences for grant-giving charities which depend on historic property endowments
- 10% of funding would be slashed – with proceeds going to billionaires, investors and non-doms
John Lyon’s Charity (JLC), one of London’s leading grant-giving organisations, has today called on the Prime Minister to intervene urgently to ensure that key support services aren’t slashed for more than 10,000 children and young people, including many from low-income families in his own constituency, under ill-considered leasehold reforms.
The Charity, along with several other organisations, will demand a legal exemption from the Leasehold and Freehold Reform Act 2024 (LFRA 24) in a four-day Judicial Review hearing at the High Court beginning tomorrow (July 15th).
The stark reality of the LFRA 24 is that without exemptions for charities like JLC there will be a direct impact on funding for vital grant-aided support services such as educational, artistic, youth and mental health programmes for children and young people, many from disadvantaged backgrounds.
JLC’s estate in St John’s Wood contains some of London’s most expensive properties meaning that this reform will divert money away from charitable causes and into the pockets of billionaires, overseas companies, non-doms and professional property investors, rather than the first-time buyers the reforms were designed to protect.
Mark Stephens, CBE, solicitor with Howard Kennedy representing John Lyon’s Charity, said: “The reforms, while well intended for homeowners and first-time buyers, have an unintended consequence which is unfair, unacceptable, and unsustainable for grant-giving charities which depend on historic property endowments to do their good work.
“In the case of John Lyon’s Charity, thousands of children and young people will be directly impacted by the reforms which will divert money from the poor and give it to the rich. That’s why we are calling for an exemption – so that first-time buyers are rightly protected not the mega-wealthy and property speculators, and so that children and young people continue to receive grant funded services which support them and their families.
“The impact is so large that it is expected that redundancies at organisations that support these services will inevitably follow. Surely that is not in the public interest?
“An exemption for property-owning grant-giving charities is the fair solution, and the Prime Minister and Labour MPs must urgently see sense.”
John Lyon’s Charity operates across nine London boroughs including PM Keir Starmer’s constituency in Camden where 39% of children live in poverty.
JLC depends on property assets to fund approximately 250 organisations each year, equating to £12-15 million in grant-giving – but the Act would slash that by 10%, transferring £1.37 million of its grants to millionaires, non-doms and investors per year.
Dr. Lynne Guyton, CEO of John Lyon’s Charity, said: “This reform pulls the rug out from underneath those who need the most support across the capital.
“Without an exemption, we will lose at least 10% of the Charity’s income. It will put educational, mental health, art, emotional support and youth programmes all at risk.
“The cuts will affect up to 10,000 children and young people and will slash the funding we award to at least 30 organisations, directly affecting their core and salary costs. As a result, many of the vital charities we support will have no choice but to close or lose staff because we are their only or predominant funder.”
One organisation whose funding would be under threat is the Adventure Play Hub in St John’s Wood, which offers all-year-round indoor and outdoor activities and meals for children, many of them from disadvantaged backgrounds.
Lauren Daley, Charity Director of Adventure Play Hub, said: “The activities, meals and support we offer children aged from five to 12 is fundamental to many of the families who live in the local area. We would not be able to offer all of that if it wasn’t for the funding, understanding and the assistance we get from John Lyon’s Charity.”
The Act is meant to strengthen leaseholders’ rights, making it cheaper and easier for leaseholders in houses and flats to extend their lease or buy their freehold, including by removing the requirement to pay marriage value and changing the qualifying criteria to give more leaseholders the right to extend their lease, buy their freehold and take over management of their building. John Lyon’s Charity does not oppose this principle.
However, the Act does not recognise the unique position of organisations like John Lyon’s Charity. It offers no exemption for organisations funded by historic property endowments, yet it does exempt entities such as the Crown Estate, the National Trust, and the Duchies of Lancaster and Cornwall.
To continue awarding grants each year, JLC depends on two primary sources of income: investment returns and revenue from the John Lyon’s Charity estate, a portfolio of residential and commercial properties.
Today, the Charity’s endowment is valued at around £389million, with around 60% of income generated from property and 40% from investments. The income from properties is essential to sustaining its grants which amount to up to £15m per year
Since 1991, JLC has granted over £230 million to more than 1,700 organisations.
The final hearing in the Charity’s Judicial Review is due to take place on July 15 – 18th at the High Court.