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January 19, 2021

OSCR intervention

In recent months, there have been concerns that Scotland’s Housing Regulator has been too quick off the mark to intervene in the affairs of housing associations – particularly for some reason, the smaller, community led providers. It would be wrong however to assume that the housing sector is alone in having a regulator prepared to intervene directly in the affairs of those it regulates. OSCR, the regulator of Scotland’s 24,000+ charities, has historically enjoyed a light touch relationship with its sector. The recent appointment of a permanent ‘judicial factor’ to run a Wick charity seems out of character. 

Stephen Delahunty, Third Sector

The Scottish regulator has appointed a manager to take over a charity as part of a decade-long inquiry to ensure its trustees do not part with its property without consent.

The Office of the Scottish Charity Regulator opened an inquiry into Wick Academy Development Fund in September 2010 after concerns were raised about its public benefit, and a failure to make use of its accumulated funds.

Formed in 2002, the charity’s purpose is to “provide facilities, or assist in the provision of facilities, in the interests of social welfare for recreation and other leisure-time occupation so that their conditions of life may be improved”.

Up until April 2009, the charity raised £140,000 by selling lottery tickets in the Wick community. However, none of the money was ever spent, according to the OSCR.

Over the next decade the regulator said it had engaged repeatedly with the charity to try to ensure that its funds were used to further its charitable purposes.

But apart from unsuccessful discussions with the local authority about support for Wick High School, the regulator said the charity had not undertaken activities in furtherance of its charitable purposes in the period since it suspended fundraising.

The OSCR said it was necessary to act in order to protect the property of the charity.

Its report says: “The charity is not providing public benefit and is therefore at risk of removal from the Scottish charity register.

“Should the charity be removed from the register the charity trustees would remain under an obligation to apply the charity’s assets in accordance with its purposes.

“We have no confidence that the charity trustees would comply with this requirement.”

In October last year the charity’s trustees were told they could not part with its property without the consent of the regulator.

Trustees then sought to dissolve the charity and transfer its property to other charities, but this was refused.

Further attempts by the OSCR to engage with the charity trustees to address the issues were unsuccessful, the regulator said.

It said that as a result, Eileen Blackburn, a chartered accountant at the accountancy firm French Duncan, had been appointed as a permanent “judicial factor” to manage the charity’s affairs and ensure its property was used for public benefit and in furtherance of its charitable purposes.