Gareth Thomas MP has questioned William Shawcross's grasp of public concerns about the Charity Commission's ability to regulate the sector effectively in the wake of the Cup Trust scandal.
Speaking in the House of Commons yesterday the shadow minister for civil society alluded to funding cuts as a reason the Commission was unable to act in the case of the Cup Trust. He posed a question to his opponent, Nick Hurd:
"As the minister reflects on the capacity of the voluntary sector," said Thomas, "he will surely consider in particular the capacity of the Charity Commission - which has been cut by a third on his watch - to prevent charities such as Cup Trust from being used for huge levels of tax avoidance. Is the minister convinced that the new head of the Commission understands the seriousness of the situation, and is a cross-government plan now in place to prevent such a repeat?" he asked.
In response, Hurd said, "Yes. Under this government, we have sent a very clear message to the Charity Commission that we expect it to hunker down on its core responsibility of regulating the sector and protecting its integrity, and, under the new chairman [Shawcross], we expect that to happen."
The comments follow a Times investigation that alleged that registered charity the Cup Trust had been used as a tax avoidance scheme, using a complex gift aid recovery system. Despite having "serious concerns" about the charity's structure and activities and having undertaken an investigation in 2010, the Charity Commission was powerless to act.
Responding to the matter last week the Commission said: "We are not comfortable with the charity’s set-up. We recognise that for a charitable structure to be used in this way damages public trust and confidence in the sector and serves to undermine the excellent work of charities...But whatever the motives for creating the Cup Trust, we were forced to conclude that we could not remove it, as the Cup Trust is legally structured as a charity." The Commission's full statement can be found here.
