The Charity Commission is urging councils to avoid “costly mistakes” with new and updated guidance to improve compliance with the law. More than 1,200 charities have a local authority as one of their trustees, but the charity regulator is concerned about a lack of compliance with charity law.
The Commission has written to every council setting out its expectations that trustees must act exclusively to further the charity’s purposes. These charities are typically those involved in recreation grounds, concert halls, or buildings of historic interest. Often, this has happened because a donor has left land or property to the council on condition it is used for charitable purposes.
The Commission said it has seen 38 separate cases in the last three years involving local authorities and charitable land. This includes attempts by councils to change the status of charity land or dispose of the land. Other issues from the regulator’s casework include failure to submit an annual return and accounts to the Commission, not keeping separate accounts for the charity, and being unaware that it is a trustee.
Every council has been urged to review its asset register to identify any charitable assets and ensure these are recorded properly. David Holdsworth, Commission chief executive, said there were “many instances” where councils have not acted in-line with charity purposes and this leads to “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,” Mr. Holdsworth added. The letter, seen by LGC, warned that failing to comply with the law can lead to a “significant administrative headache for the local authority to retrospectively correct the situation”.
The Commission updated its general guidance for local authorities, produced new guidance specifically about recreation grounds, and worked with the Local Government Association on a guide for councillors. Mr. Holdsworth said that by following the guidance councils can “avoid costly mistakes”.
An LGA spokesperson said: “We were pleased to work with the Commission on this guidance, which will help clarify councils’ trustee roles and act as a reminder for them to check they are up-to-date with these duties, given the historic nature of many charitable organizations.”
In conclusion, it is essential for councils to adhere to charity law and act in the best interests of the charities they are trustees of. By following the guidance provided by the Charity Commission and working closely with organizations like the Local Government Association, councils can avoid costly mistakes and ensure that charitable assets are managed properly. Compliance with the law not only protects the interests of the charities but also prevents unnecessary administrative burdens for the local authorities.