Charity Commission Chief Executive, David Holdsworth, is today
writing to all local authorities in England and Wales setting out
urgent action they can take to ensure they comply with the legal
responsibilities of charity trusteeship, which makes them
responsible for running the charity and managing its
assets.
The letter, which coincides with updated guidance the regulator
has developed with the Local Government Association, will
highlight the Commission has dealt with several recent cases
involving council trusteeship and warns of the “significant
administrative headaches” councils could face from any failure to
correctly comply with their duties.
One common problem the Commission sees in its casework arises
from council trustees changing the use or status of charitable
land or disposing of it in a way that is incompatible with its
charitable purpose, sometimes without knowing it is charity
property. David Holdsworth is warning councils that these
failings can be costly and resource intensive to correct. In the
last three years, the regulator's casework teams have dealt with
38 separate cases involving local authorities and charitable
land.
Councils are typically trustees of charities that run public
facilities serving local communities such as recreation grounds,
public gardens, concert halls, and buildings of historic
interest. More than 1200 registered charities list a local
authority as a trustee.
Issues that commonly arise as part of the regulator's casework
include when a council:
-
is unaware that it is a trustee of a charity
-
does not keep separate accounts for the charity
-
does not submit accounts or annual returns to the Commission
when due
-
unknowingly uses charity land for its own council
purposes
-
disposes of charity land without managing conflicts of
interest that can arise between its role as trustee and
statutory authority
When these failings occur, councils can face public criticism and
sometimes financial loss for the charity. The most serious issues
can also take time to put right.
To address this, the regulator has refreshed its guidance for
local authorities and its supplementary guide designed
specifically for councillors.
The guidance sets out advice for councils, including when they
are making decisions as a trustee. It is for the council as
trustee to make decisions about the charity, but it must comply
with charity law when exercising its duties as a trustee. It
covers a range of issues and includes a checklist that council
officers and councillors can use to check compliance and improve
governance. The separate guide for councillors is a short
introduction to the topic and includes examples of issues that
can arise.
The regulator has also refreshed its guidance for trustees
running recreation ground charities, as they can face unique
challenges. While this guidance is not specifically aimed at
councils, the Commission hopes it will prove useful to local
authorities if they are approached for help by recreation ground
charity trustees in their area.
David Holdsworth, Chief Executive at the Charity
Commission, said:
“More than 1,200 registered charities, including vital community
assets, are governed by councils. The law expects them to comply
with key responsibilities, at the heart of which sits the
requirement to exclusively further the charity's
purposes.
“We've seen many instances where councils haven't done this,
resulting in members of the public rightly coming to us with
concerns, and we have had to step in. In some cases, our
involvement could have been avoided with earlier action by the
local authority.
“We recognise the administrative demands that being a trustee may
place upon councils, which is why we have produced this guidance.
I have written to all councils across England and Wales on what
they can do to avoid costly mistakes, asking them to mark
charitable assets on their register and for their employees and
councillors to read our updated guidance.”
ENDS Notes to
editors:
- The Charity Commission is the independent, non-ministerial
government department that registers and regulates charities in
England and Wales. Its ambition is to be an expert regulator that
is fair, balanced, and independent so that charity can thrive.
This ambition will help to create and sustain an environment
where charities further build public trust and ultimately fulfil
their essential role in enhancing lives and strengthening
society. Find out more: About us - The Charity
Commission - GOV.UK (www.gov.uk)
- Our new guidance for Local Authorities as Trustees can be
found here: Local authorities as
charity trustees - GOV.UK (www.gov.uk)The supplementary
document for councillors and local officers which provides case
studies can be found here: Councillors' guide to a
council's role as charity trustee
(publishing.service.gov.uk)
- Our new guidance for trustees of charities with recreational
ground can be found here: Recreation ground
charities - GOV.UK (www.gov.uk)
- Find out who the trustees are of any registered charity on
the charity register here: Search the charity register -
GOV.UK (www.gov.uk)
