The Charity Commission has written to all councils in England and Wales after identifying a “significant number” of cases where they are failing to correctly manage charities they are responsible for.
The regulator has worked with the Local Government Association to produce updated guidance covering the about 1,200 charities in England and Wales that have a local authority as trustee.
In the letter, David Holdsworth, chief executive of the regulator, said he understood that these were tough times for local authorities.
“It is therefore not unsurprising that we have seen a rise in the disposal of, or a change of purpose for, charitable assets such as buildings or land as councils look to balance their budgets in challenging circumstances,” he said.
“We are, however, also seeing a significant number of cases where local authorities have failed to comply with their legal duties as charity trustees and we have had to take action following receipt of complaints from the public.
“Such cases can be costly and resource-intensive for both local authorities and for us as the regulator.
“Often these changes, if not done correctly, will also result in additional budget pressures on local authorities rather than providing the additional resources initially thought.”
Charities overseen by local authority can include public facilities such as recreation grounds, concert halls, swimming pools and war memorials.
Holdsworth said common problems include councils changing the use or status of charitable land, or selling it off, in ways that were not compatible with its charitable purpose or without realising it was charitable property.
Other issues included councils being unaware they are the trustee of a charity, failing to submit separate accounts for the charities under their stewardship or unknowingly using charitable land for local authority purposes.
“As well as causing concerns for local beneficiaries of the charitable asset, it can create a significant administrative headache for the local authority to retrospectively correct the situation,” said Holdsworth.
“We have dealt with recent cases involving local authorities which highlight the inherent risks of councils not identifying issues pertaining to charitable land early enough, or at all.”
The new guidance can be found here.