The High Court has ruled that £500m from the dormant National Fund could be transferred to charity.
The decision, published yesterday, is the latest in a series of legal rulings concerning the National Fund, a charity which was established in 1928 with the aim of paying off the UK’s national debt after the first world war.
The attorney general brought the case in 2018, arguing that the assets should be transferred to the Treasury.
End to limbo?
The judgment found that the chances of the National Fund ever achieving its charitable aim of discharging the national debt were “so remote” that courts could order its assets to be used to fund other charitable causes. This would avoid the risk that the Fund was left "in limbo, with no benefit accruing to charity at all".
A final decision on whether this redistribution will go ahead, or which causes may benefit, will be made at a future hearing.
No donations in 30 years
The National Fund was created with an endowment of £500m from an anonymous benefactor. The court documents identify the benefactor for the first time as Gaspard Farrer, a partner at Barings Bank.
Treasury officials said at the time that Farrer made the payment so that “other rich men would be induced to follow his example” and help the government realise its policy of not passing the war debt onto future generations, according to documents.
At the time the national debt stood at £7bn
The judgment notes that, although other philanthropists did give money to the fund, no donations have been received since 1982.
The High Court agreed with expert evidence that the likelihood of the National Fund ever achieving its charitable aims is “vanishingly small”. The value of the National Fund is equal to just 0.026% of the current national debt, according to the court documents.
The judge concluded that the courts had the jurisdiction to make an order altering the charitable trust, so that the National Fund’s assets could be distributed to other causes, but deferred further decisions to a future hearing.
Arguments about the future of the National Fund go back more than a decade, when Civil Society News first researched its status.
The Labour shadow charity minister subsequently took up the fund’s future with the government, which argued that the money could be used to pay down national debt.
Charities and politicians have earmarked the National Fund’s assets, if released, for numerous causes. Most recently, Danny Kruger’s review of charities suggested the £500m could endow a Community Recovery Fund to support community groups as they help the country recover from the impact of Covid-19.