May 12, 2016

Committee calls for new checks on charities to be introduced

The House of Commons’ Public Administration and Constitutional Affairs Committee has made the case for more rigorous rules to be introduced.

The new regime would in part be a response to the high-profile collapse of Kids Company – a children’s charity which received a significant sum of public money.

Under the arrangements, a central register of charity grants would be drawn up and a new efficiency programme implemented as part of wider efforts to improve transparency.

The Government said it was considering the committee’s findings and in a statement it seemed to acknowledge that a new way of doing things needed to be adopted.

“We are considering a range of proportionate checks that can be undertaken, both as part of initial due diligence and on an ongoing basis,” said a spokesman.

“These could include requiring sight of the charity’s management letters, seeking further assurance from the charity’s auditor, or asking the charity to provide specific financial and relevant other information as part of the grant application process.

“We will also move toward a requirement for comprehensive annual reviews on all grants.”

A recommendation that no money be handed to charities about which a serious accusation has been made but not investigated is also likely to be adopted.

Royds has a wealth of experience advising charity clients on the laws and regulations affecting the sector. For further advice on these matters contact Tony Millson ([email protected]) or Deanna Hurst ([email protected]).

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