Charity attempts to dodge quango status

Lawyers are advising it to transfer assets to a new organisation in order to assert its independence

Lawrie Simanowitz, partner, Bates Wells & Braithwaite
Lawrie Simanowitz, partner, Bates Wells & Braithwaite

A charity that is in dispute with the government over whether it has non-departmental public body status plans to transfer its assets to a new charity to assert its independence, according to Bates Wells & Braithwaite, the organisation's legal advisers.

"We were approached by a client that was a registered charity but was being treated as a quango," said Lawrie Simanowitz, a partner at the firm. "We formed the view that it was not a quango."

Simanowitz said he could not name the organisation because of client confidentiality, but said it consisted of a permanent endowment of several million pounds that did not receive any government money.

"We have recommended that they take all the money out of the charity and transfer it to a new organisation with a governing document clarifying that it is not a quango," he said. "They are making a bid for freedom in the next few months."

Simanowitz said that he believed there was "a fair degree of incompetence on the part of the government about what funds they have under their control". He said he suspected that a number of other charitable organisations were finding themselves in a similar situation.

"This is a historical problem," he said. "The government has been doing it for years and no one has ever challenged it. In this case, our client found it easier not to argue until the government proposed spending its money in a way it didn't like. It's clear that the government doesn't understand charity law."

Other charities have previously fought to win independence from the government after disputing whether they had quango status. From 2005 to 2008 the Churches Conservation Trust battled with the Department for Culture, Media and Sport, which claimed that the trust was under its authority.

The DCMS eventually wrote to the trust confirming its independence: however, it was listed among the bodies retained as quangos during the recent overhaul.

* Read this week's feature about quangos becoming charities

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