Charity Commission warns local authorities in England and Wales of trusteeship failings

The Charity Commission says it has recently dealt with several cases in which a council acting as trustee had failed to correctly comply with its duties. It warns that there could be 'significant administrative headaches' for erring councils in these circumstances.

Councils are typically trustees of charities that run community facilities such as recreation grounds, public gardens, concert halls and buildings of historic interest. More than 1,200 registered charities list a local authority as a trustee. One of the most common errors arises when council trustees change the use or status of charitable land or dispose of it in a way that is incompatible with its charitable purpose. Sometimes the council does this without even realising that it is acting as the property's trustee, rather than beneficial owner. This means that it does not keep separate accounts for the charity and does not submit accounts or annual returns to the regulator. It could also unknowingly use charity land for its own council purposes, due to the passage of time or turnover of council staff.

The serious budgetary problems now prevalent among local authorities have caused a rise in the disposal of, or change of purpose for, charitable assets such as buildings or land. In the last three years, the Charity Commission's casework teams have dealt with 38 separate cases in which local authorities were alleged to have misused or sold charitable land. Such failings can be costly and resource-intensive to correct, it says.

'We have seen many instances where councils have not [acted exclusively further the charity's purposes], resulting in members of the public rightly coming to us with concerns, and we have had to step in', said the Charity Commission. 'In some cases, our involvement could have been avoided with earlier action by the local authority.'

The Charity Commission has also issued updated guidance to local authorities, setting out advice in complying with their legal responsibilities and giving examples of cases where a council has acted wrongly.

Sources

• Charity Commission
• Charity Commission (new guidance for local authorities as trustees)
• Charity Commission (case studies)
• Third Sector Online
• Civil Society