The Charity Commission has this week published an operational compliance report on Fairfield (Croydon) Ltd, after it intervened when Croydon Council asked the charity’s trustees for it to be admitted as a member with 75 per cent voting rights.

Fairfield (Croydon) Ltd maintains and manages the council-owned Fairfield Halls.

The Charity Commission’s report said the council wanted to become a trustee because it planned to invest significant funds in refurbishing Fairfield Halls and wanted to "ensure its funding was being used to best effect".

The report continued: “The proposal was therefore of regulatory concern to us, because it would have effectively meant the takeover of the charity by the local authority in a way that allows the authority to influence decisions made by the charity in its own, rather than the charity’s interests. This raised questions as to the future charitable status of the organisation.”

After intervention from the Commission, the trustees said they had considered the proposals and sought legal advice. Later, the trustees confirmed that Croydon Council withdrew its proposal.

The report concluded: “Charities are run by their trustees for the benefit of the charity’s beneficiaries. An organisation cannot be a charity if it is run in the interests of anyone beyond the charity, including private individuals and public  bodies such as local authorities.

“This case demonstrates that trustees must be mindful of charity law, including by seeking specialist advice where necessary, when negotiating relationships with third parties.”