Cup Trust scandal a 'disaster' for the sector, Charity Commission chair tells MPs

Giving evidence at the Public Accounts Committee, William Shawcross says the revelations about tax avoidance have hurt public trust in charities

William Shawcross
William Shawcross

The Cup Trust tax-avoidance scandal has been a disaster for the voluntary sector, William Shawcross, the chair of the Charity Commission, has told MPs.

Giving evidence before the Public Accounts Committee in Westminster this morning, Shawcross said that public trust in charities had been harmed by the revelations about the Cup Trust, which raised £176.5m in private donations over two years but spent only £55,000 on good causes.

"This whole thing has been a disaster for the charity sector," Shawcross said. "It has affected public trust and confidence in charities.

"It is very damaging to the sector and it is very damaging to the Charity Commission that this has happened."

Margaret Hodge, chair of the committee, said that the National Audit Office had agreed to "make a longer study" into the commission's regulatory conduct.

She said that the committee was "pretty appalled" by the commission and questioned whether it had "the right regulatory regime" to ensure that charities were being properly regulated.

She questioned whether it was proper that the commission made only 20 compliance visits a year, and said that the commission appeared never to have used several of its powers.

"We have questions about whether you're fit for purpose," she said.

Richard Bacon, Conservative MP for South Norfolk and another member of the committee, said a report published in 2001 called Giving Confidently had registered concerns about the lack of investigation carried out by the Charity Commission, and had cited previous concerns about the same issue going back to 1988.

"You're a scratched record," he said. "This has been a problem for 25 years."

Shawcross said he felt the commission should have made public the fact that it had investigated the Cup Trust and had not been able to take action, and said that the commission would be more open if similar issues arose in future.

He admitted that the regulator "should have asked more questions".

"The fact that it was based in the British Virgin Islands should have raised a red flag," said Shawcross.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Follow us on:
  • Facebook
  • LinkedIn
  • Twitter
  • Google +

Latest Jobs

RSS Feed

Third Sector Insight

Sponsored webcasts, surveys and expert reports from Third Sector partners

Markel

Expert Hub

Insurance advice from Markel

Managing data protection for your charity

With the increasing number of data breaches in the UK, it is crucial that your charity manages data protection effectively.

Third Sector Logo

Get our bulletins. Read more articles. Join a growing community of Third Sector professionals

Register now