Silence from Darling over charities' financial plea

Chancellor Alistair Darling has been criticised for failing to respond to a plea for charities to have their accounts protected in the event of bank failures.

John Low, chief executive of the Charities Aid Foundation, wrote to Darling and the Financial Services Authority in August asking for deposits of charity money to be fully guaranteed.

In the letter, Low said limiting the amount secured would lead to charity closures. "The impact of this on the people and causes dependent upon them could be catastrophic," he warned.

Low, however, received no reply. "What was disappointing was that there was no response whatsoever," said Low. "It was a serious point we were making. We anticipated problems."

Since then, about £230m belonging to 99 UK charities has been jeopardised by the collapse of the UK arm of Icelandic bank Kaupthing Singer & Friedlander.

The Treasury was unable to comment. Last week, Treasury minister Paul Myners met Low and four other voluntary sector representatives to discuss ways of resolving the problem.

Meanwhile, Scottish charity regulator the OSCR has said it is in talks with the Scottish Government to clarify the position regarding compensation of charity deposits.

"We are also discussing with government and other policy makers the longer-term implications for the charity sector, particularly the impact on long-term funding and sustainability," an OSCR statement said.

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