Finance News: Bill will open funds access for Scotland and Northern Ireland

Mathew Little

Approximately 40,000 more charities are set to gain access to common investment funds following the publication of the draft Charities Bill.

The Bill proposes to allow Scottish and Northern Irish charities to participate in the schemes, which pool the investments of several charities. So far, only English and Welsh charities have been legally entitled to join the funds.

The move may help to reverse the traditional underperformance of Scottish charity investments. This has been blamed on the fact that common investment funds are closed to Scottish charities and that the Trustee Act 2000, which broadened the types of investments available to charities, did not apply in Scotland.

According to the Scottish Voluntary Sector Almanac, the average return on UK charity investments is 6 per cent, but for Scottish charities it is just 4 per cent.

Stephen Maxwell, associate director of the Scottish Council for Voluntary Organisations, said: "The SCVO welcomes this development. We have campaigned for Scottish charities to have the same investment rights as their English counterparts. Allowing Scottish charities to invest in common investment funds restores equity of investment opportunity."

But Northern Irish charities seem less keen to take advantage of a more liberalised investment climate. According to the Northern Ireland Council for Voluntary Action, the province's charities invest just £148m on the stock market.

"There could be difficulties," said Nicva finance manager Fancea O'Neill.

"There is no harm for the option to be available but I doubt it will be suitable. What happens if one organisation wants to withdraw its money?

But if there is consultation, there could be ways of overcoming problems."

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