Garden Bridge Trust failure could damage public trust in sector, warns Charity Commission

10 Apr 2019 News

The Garden Bridge project was an “expensive failure” which "risks undermining public confidence" in the sector, the Charity Commission has said.

In a concluding report published yesterday, the regulator has said that the Garden Bridge project, a plan to build a pedestrian bridge over the Thames which was cancelled in 2017, was a "failure for charity", but reaffirmed its stance that the trustees overseeing the project were not in breach of charity law.

“The Garden Bridge project was a high profile and expensive failure; significant sums of public money were spent on a footbridge for London which never materialised,” the report said.

“We remain assured that the trustees fulfilled their legal duties in their decision making regarding the construction of the bridge.”

It comes after continued criticism of the failed infrastructure project, which used some £53.5m of public funding. Most recently, Caroline Pidgeon, Liberal Democrat London Assembly member wrote a letter to the Commission urging the regulator to re-examine the charity.

The report also reaffirmed the Commission’s earlier conclusions, published in February 2017, that the charity could have made improvements to their annual reports, that it should have assessed the risk of the project better and that it should have operated with greater transparency and accountability.

Lessons for the sector

Baroness Stowell, chair of the Charity Commission, said the charity’s collapse could undermine public trust in the sector overall.

She said: “Londoners and taxpayers will legitimately feel angry and let down by the waste of millions of pounds of public money on a charitable project that was not delivered.

“I understand that anger and am clear that this represents a failure for charity that risks undermining public confidence in charities generally.

"While the charity was not mismanaged, the public would also expect, as I do, that the right lessons are learnt from this case, so that we don’t see a similar failure arising in future.”

Change of approach

The Commission said the fact the charity was funded and supported by TfL represented a “considerable risk” and that it constituted a “very serious responsibility”.

It warned against the government setting up a charity for a single purpose, arguing that “this approach is unusual” in comparison to when the government procures existing charities to manage projects.

It said that in the future, project founders should consider whether or not setting up a charity is the best avenue to do so due to the fact that it creates a different relationship with funders and places regulation out of public jurisdiction to the Commission.

On this relationship, the report said that it meant the charity “did not have the usual flexibility and discretion that allows trustees of charities with broader charitable purposes contracting with national or local government to continually assess whether doing so is the best way to deliver on those purposes for the public benefit.”

It said: “If a charity is to undertake a significant public project then it should have appropriate governance arrangements in place and recruit trustees with the necessary knowledge, skills and experience.

“The regulation of charities by the Commission can provide a basic assurance regarding trustees’ compliance with their charity law duties and responsibilities, but it cannot replace sound and detailed contracting arrangements and controls.”

It also said that the Commission will change the way it regulates charities. It said that despite having to register charities that meet legal charitable status, it has learnt that this does not mean that the regulator should not engage with them to make sure they understand what they are doing.

It said: “In future, when we receive applications from charities established, or being established, wholly or mainly to deliver a publicly funded project, we will engage with those seeking to establish the charity to ensure they understand the consequences and responsibilities that follow, including the need to meet the public’s expectations around the transparency and financial stewardship.

"This will not affect the status of such organisations as charities, which is determined in accordance with the legal test.”

'Diappointing but inevitable'

Commenting on the report, Pidgeon said: “It is disappointing although perhaps sadly inevitable that that the Charity Commission rely so heavily on legal definitions of charity law and continue to hold the line that they cannot take any further action.

"They even highlight some serious criticisms of aspects how the Garden Bridge Trust operated, in relation to publishing its accounts and their overall lack of transparency, but ultimately claim that on technical grounds they themselves can take no further action in investigating the project.

“I welcome the fact that they are sending out a very strong message about how many lessons need to be learnt before new charities are casually set up by government, solely to deliver a single public infrastructure project”.

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