'Conflict of interest' in sole charity trusteeships

Local councils should be joined by independent trustees, says legal expert

Conflicts of interest frequently arise when a local authority is the sole corporate trustee of a charity, according to a lawyer who has fought to prevent councils acting beyond their powers.

Jonathan Brinsden, a partner at specialist charity law firm Bircham Dyson Bell, said one solution was to appoint additional trustees so the interests of the council could not be put above those of the charity.

Brinsden has twice advised local residents on how to prevent councils selling off charitable assets. Hundreds of charities have councils as the sole trustee, often for historical reasons.

"There is often an inherent conflict of interest when local authorities act as trustees, and councillors are often not sensitive towards this," he said. "It is an even more common problem with NHS charities. The Charity Commission has had to step in several times to stop the mismanagement of charitable assets.

"It must be in the best interests of everyone to have independent trustees. Otherwise, there is always the risk that charities will disappear into the accounts of public bodies."

In one instance he dealt with, he said, the solution had been to appoint two local residents as joint trustees of a recreation ground alongside the council, an arrangement he said was "working very well".

In another case dealt with by Brinsden, at the Livesey museum in Peckham, south London, local people have prevented the council selling the building and are campaigning to win a role in the charity's management.

"The council's management didn't even know it was a trustee," said Liz Williamson, treasurer of local campaign group the Friends of Livesey Museum.

Marieke Dwarshuis, head of policy and development at the Office of the Scottish Charity Regulator, said a reform of the way local authorities administer charities is already under way in Scotland. Local authorities were being encouraged to look at every charitable trust they managed and consider whether it was being run effectively.

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