The board of the Charity Commission must take responsibility for the “staggering” decision to take legal action against the Public Service Ombudsman, a committee of MPs has concluded.
The House of Commons Public Administration and Constitutional Affairs Committee has today published its report into the row between the commission and the PSO, which this month changed its name from the Parliamentary and Health Service Ombudsman.
The report strongly criticises the commission’s actions and rejects the regulator’s claim that it had been forced into taking legal action against the PSO because the commission would have been made to act outside its remit.
It condemns the regulator’s handling of two separate complaints about safeguarding failings at different charities, which gave rise to the original dispute between the two public bodies.
Simon Hoare, chair of the committee, said the handling of the cases “should be exhibited as a shining example of how a public body should not conduct itself”.
The report also says it is “concerned by what we have seen of the culture within the Charity Commission”.
It says: “The handling of the cases themselves, and in some instances, the attitude displayed by Charity Commission representatives in pursuing their action and when giving evidence to this committee, has emphasised the need for a significant cultural shift.”
The committee calls for a wider review of the Charity Commission’s powers and how it exercises them.
The regulator said it fully accepted the committee’s recommendations and reiterated its apologies for its actions.
The row between the commission and the PSO began after Lara Hall and Damian Murray raised separate safeguarding concerns with the Charity Commission in 2019 and 2018, respectively.
The PSO investigated the commission’s handling of these cases and in 2024 found maladministration, noting the regulator failed to provide documented risk assessments or show that relevant considerations were taken into account.
The commission conducted internal reviews following the ombudsman’s report, but the PSO issued a letter in 2025 stating that the injustice to the complainants remained “unremedied” and outlining the ombudsman’s intention to lay special reports before parliament.
The Charity Commission launched a legal challenge last year against the PSO’s decision that it failed to implement recommendations from the two cases.
The regulator said it believed the PSO’s recommendations forced it to act beyond its legal remit and undermined its ability to regulate independently.
But in March, the High Court rejected the regulator’s claim on grounds including that the claims were “academic”, mainly because the reports had already been laid before parliament following a House of Commons order.
A report by the House of Commons Committee of Privileges concluded in July that the commission had committed a contempt of parliament when it brought the legal proceedings against the PSO.
It also recommended that David Holdsworth, chief executive of the Charity Commission, should apologise to parliament “for repeatedly saying that the commission’s legal action was not intended to quash the laying of the reports when that was precisely its purpose”.
Today’s PACAC report says: “We note the Charity Commission’s acceptance of the court’s decision to refuse it permission to proceed with its judicial review.
“However, we find it staggering that the Charity Commission ever believed its best course of action was to pursue legal action against another publicly-funded organisation.
“This had considerable consequences, including significant cost to the taxpayer and further distress and inconvenience to the two complainants, Ms Lara Hall and Mr Damian Murray.”
The report says the commission’s board was “overly reliant on the legal advice it received and did not give sufficient weight to other considerations in its decision-making”.
It says the decision to seek permission for judicial review was a board decision, not one taken by the Charity Commission’s lawyers, “and the board must, ultimately, take responsibility”.
Dame Julia Unwin, chair of the Charity Commission, said: “The board fully accepts the committee’s recommendations. We have long accepted errors in how we approached the two cases investigated by the Public Service Ombudsman and have apologised to both complainants.
“We have also apologised unreservedly to parliament for persisting with legal action in relation to the ombudsman’s reports.
Unwin, who became chair of the regulator in January, said: “We have already introduced a number of changes to the way in which we assess risk and communicate with those who raise concerns with us.
“An independent review into the way in which we handled the two cases is also underway, led by former appeal court judge Sir Gary Hickinbottom.
“We stand ready to implement any recommendations from that review, and in doing so will reflect carefully on the committee’s findings.”