Commission CEO urges local authorities to comply with trustee duties after number of breaches
Melanie May | 12 August 2024 | News
Charity Commission CEO David Holdsworth wrote to local authorities in England and Wales last week with a call to comply with their charitable trustee duties, following a number of breaches.
In the last three years for example, the regulator’s casework teams have dealt with 38 separate cases involving local authorities and charitable land.
Holdsworth’s letter sets out urgent action local authorities can take to ensure they comply with the legal responsibilities of charity trusteeship, highlighting that the Commission has dealt with several recent cases involving council trusteeship. Holdsworth warns of the “significant administrative headaches” councils can face from any failure to correctly comply with their duties, as well as the public criticism, and the financial loss that can sometimes result for the charity.
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Common issues 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
The letter coincides with updated guidance the regulator has developed with the Local Government Association. This sets out advice for councils, including when they are making decisions as a trustee, and covers a range of issues. It includes a checklist that council officers and councillors can use to check compliance and improve governance. There is also a separate supplementary guide for councillors. In addition, the regulator has refreshed its guidance for trustees running recreation ground charities, which it says “can face unique challenges”.
More than 1200 registered charities list a local authority as a trustee – typically those that run public facilities serving local communities, such as recreation grounds, public gardens, concert halls, and buildings of historic interest.
David Holdsworth, Chief Executive at the Charity Commission, commented:
“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.”
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About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.