(6 years, 9 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
I am grateful for the opportunity to raise concerns about the running of the Island Health Trust by its trustees and about the role of the Charity Commission. I would like the Minister to reassure me that when apparent abuses are highlighted, the Charity Commission has the appropriate powers and resources to investigate and intervene where necessary.
By way of a brief background, the Island Health Trust was set up to hold the physical asset of a health centre that provides much-valued GP services to residents on part of the Isle of Dogs. The centre also hosted several other health services at the same location. The centre was originally funded by a mixture of loan finance and grants from the London Docklands Development Corporation and Tower Hamlets Council, after a local campaign for such a centre in the 1980s.
The trust’s main sources of income are the rent from the local NHS clinical commissioning group and the service charges paid by the good doctors who work at the health centre. From that, the trust has accumulated a surplus of some £1.3 million. There are serious questions about £349,000 having been paid to a consulting company that is solely owned by the chair of trustees, Ms Suzanne Goodband. That represented 68% of the charity’s income over two years.
Despite the surplus that has built up, the trust has increased doctors’ service charges to such a high level that the GP practice has been forced to vacate the health centre’s first floor and other ancillary services have also had to move. There are concerns about trustees’ ulterior motives with respect to the future use and development of the building. There are suggestions that there is a plan to develop and build on the site, which has high land value, but such development cannot take place because of the terms of the original title deeds and arrangements, which were laid down decades ago.
It might be helpful if I list the concerns of local people and their representatives before I raise questions about the powers and response of the Charity Commission. The local concerns are, first, about money—the payment of £349,955 to the trust chair’s consulting company.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on securing this Adjournment debate, which highlights an important issue. Does he agree that regardless of how the money is distributed by the trustees, there must be checks and balances to secure the moneys? If things do not add up, questions should rightly be asked and must be answered. The hon. Gentleman is asking those questions.
Jim Fitzpatrick
The hon. Gentleman raises the central point that I am trying to make. I hope to elaborate on why there are so many concerns locally.
As I was saying, a number of questions have been asked locally, including about the lack of local control and the fact that there have been 10 new trustees since April 2016, but curiously none of them was appointed from among the residents who actually live locally or are patients at the centre. Other concerns include the loss of services at the centre—I have already mentioned the emptying of the first floor; the high increase in service charges at the centre, which has led to the emptying of the building; a trustee being removed without notice or agreement; and trustees approving payments for periods before they were appointed as trustees. I will come back to that last concern, because it seems to me to be bordering on fraud and so possibly criminal.
People are concerned about the resolutions that altered the trust’s constitution, which were allegedly approved by a trustee who has written to the Charity Commission to deny that he did so. At the time of the amendment, the board of trustees had a quorum of three and there were only three trustees, so his denial calls into question the legality of such changes. If the decisions were not legal, the spectre of fraud arises again.
In addition, there have been claims by the chair that she has expertise in getting around restrictions imposed by the Charity Commission; accounts detailing “grants” given by the trust in 2016-17 that were not approved until autumn 2017, six months after the end of the financial year; and accounts detailing “grants” that were actually costs, such as for a deep clean of the centre, which was never a grant. To suggest that the trust was making grants, in line with its constitution, seems to be a defensive move, but it is clearly false. That is not an exhaustive list.
This debate appears to be mainly about health provision on the Isle of Dogs, because it is about the running of a local health centre, but because the Island Health Trust is a charity, the management and running of the building is not an NHS responsibility. I am grateful to see the much respected Minister from the Department for Digital, Culture, Media and Sport responding and not one from the Department of Health and Social Care, because it is the Charity Commission, for which DCMS has oversight, that is responsible for governance of the IHT, not the Department of Health and Social Care. That itself raises questions about the model of oversight and controls —or the lack of them—but that is a separate issue.
I would not want the record to give the impression that it is just me who is unhappy. This matter is of public and cross-party concern. To show that, I need to say that these issues have also been raised by the mayor of Tower Hamlets, Mr John Biggs, who has written to me, the Department of Health and Social Care and the Charity Commission; the Tower Hamlets CCG; Blackwall and Cubitt town councillors Dave Chesterton and Candida Ronald, who have led the local campaign on this important issue, engaged directly with the Charity Commission, and written extensively to raise the alarm; and the leader of the Conservative group in Tower Hamlets, Councillor Peter Golds, who has also written to all concerned.
There has also been a resolution, unanimously passed by Tower Hamlets Council, and finally by a public meeting attended by more than 100 residents and patients. We therefore look to the Charity Commission to address the concerns. I first wrote to the Charity Commission on 10 February 2017, having been alerted to these matters. It wrote back, apparently on 2 March 2017, although I did not receive the response until 20 July that year, probably owing to the general election. Its conclusion in that correspondence was:
“The Commission is satisfied that the Trustees have acted within their powers.”
Needless to say, that was not the response that we wanted or hoped for, so we asked for an urgent meeting. Councillor Ronald and I got that meeting on 24 August 2017, when we personally presented our evidence, and asked why and how the commission could possibly arrive at the conclusion that the trustees acted within their powers in respect of the money paid to the chair’s personal consultancy. I should say that at that point we only knew about £180,000, as the latest accounts had not been published. It was only afterwards that we found out that it was nearly £350,000 that had been paid.
Although that did not look right to us, we then got correspondence from the commission on 1 September 2017, which stated that
“remuneration of the trustees, is explicitly allowed in the charity’s governing document, and therefore the Commission cannot intervene.”
That is key, because the constitution, which allows the payments to be made, only does so because it was altered by a vote of the trustees—a vote that I hope to demonstrate was actually invalid.
Evidence from documents supplied to the Charity Commission shows that the charity’s constitution was altered on 27 February 2015, reducing the quorum for decisions from three to two. It reads:
“The Companies Act 2006—Special Resolution:
1. That article 9.2 of the Charity’s Articles of Association be amended, such that Article 9.2 should read: ‘A quorum is two Trustee members.’”
This sounds fine, except that I have an email from one of the trustees at the time, Mr Stephen Molyneaux, which says:
“I was a Trustee of the Island Health Trust from the 1990s through to my ‘removal’ on 1 April 2016.”
He goes on to say that he wrote to the Tower Hamlets CCG expressing his concerns. He writes:
“This includes the ‘certificate of passing special resolutions’ which altered the constitution of the Island Health Trust. I can say categorically that these changes, were not approved by me. At the time that these resolutions were passed, the quorum for the Island Health Trust was three.”
He goes on:
“There were only three Trustees at the time – Suzanne Goodband, Alan Holman, and me. In the absence of my agreement, these changes could not have been legitimately agreed.”
It appears that the trust paid the chair’s consultancy over £300,000, and the Charity Commission concluded from the trust’s constitution that it had seen
“that the Trustees have acted within their powers,”
and
“that remuneration is allowed in the Charity’s governing document.”
But Mr Molyneaux, one of the three trustees in an organisation of only three trustees with a quorum of three trustees for decisions, says that the rule changes did not happen because he was not there.
Further to the meeting that Councillor Ronald and I had with the Charity Commission, and Mr Molyneaux’s email, the Charity Commission got in touch again. This time it said:
“However, we will look again at IHT and the decisions of the Trustees”.
On 1 December 2017, correspondence from the Charity Commission arrived saying that it had opened a statutory inquiry, which was better news. But two additional concerns are being raised locally.
First, a Charity Commission letter to me on 14 January 2018 says that
“the Commission normally deals directly with the Charity trustees.”
I seek reassurance from the Minister that former trustees, especially the whistleblower, Mr Stephen Molyneaux, will be interviewed, as well as others who have important evidence.
Secondly, a current trustee who contacted the commission with concerns reports that they were essentially told that as a trustee they are responsible, and that they should step down if they have concerns. That is second-hand information and not in writing, but the trustee is a professional person and I do not believe they could misunderstand. If that advice is accurate, it raises serious questions for other whistleblower trustees and the attitude of the Charity Commission towards them. It should afford them protection rather than just advising them to walk away.
There is serious unhappiness that a much used, needed and appreciated local health centre with professional clinicians and caring staff is being bled by people who should be cherishing, nourishing and promoting it. Furthermore, the Charity Commission, which is responsible for protecting public money and the good name of organisations that receive that money, could have acted more quickly and seems limited in how it can act. Money that should have been used for the health and welfare of local citizens instead sits in the bank account of an individual who boasts of getting around the rules and who has a chequered history of having previously resigned from an NHS trust, reported in the local media thus:
“In January 2004, Suzanne Goodband mysteriously quit her role as chief executive of the Royal Berkshire and Battle Hospitals’ NHS Trust, after just seven months in charge.”
I hope that the Department of Health has advised the Minister what the background to that resignation was, as the information is not public. It may be entirely innocent, but I hope that the Minister can understand that there are local suspicions in east London.
This is a serious local issue, and I look forward to hearing some reassurance from the Minister. Locally there is disbelief, as what has happened is not only questionable but wrong and possibly criminal. The Charity Commission is the body that we all expect not only to safeguard public moneys but to protect the reputation of the charity sector and to sort things out when they go wrong. I hope that the Minister can confirm that it has the resources and the powers to do that important job.
The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Tracey Crouch)
I thank the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) for bringing forward this debate, and for his informative and passionate speech. It is always good to see hon. Members and local councillors across the political spectrum working together to stand up for their communities and hold charities to account.
Based on information brought forward by the hon. Gentleman and others last year, the Charity Commission engaged with Island Health Trust. That engagement raised serious regulatory concerns, and consequently the commission opened a statutory inquiry in November 2017. The statutory inquiry into the Island Health Trust is live and ongoing. Therefore, neither I nor the Charity Commission can comment on the details of the investigation, so as not to prejudice its outcome. However, I reassure the hon. Gentleman that the inquiry remains a priority for the commission, and that it aims to conclude the inquiry as soon as possible.
The purpose of an inquiry is to examine relevant issues in detail; investigate and establish the facts so that the regulator can ascertain whether there has been mismanagement and/or misconduct; establish the extent of any risk to the charity’s property, beneficiaries or work; and decide what action needs to be taken to resolve the serious concerns, if necessary using the Charity Commission’s investigative, protective and remedial powers. The commission published the scope of the inquiry and is clear that it examined the extent to which the trustees had prudently managed the charity’s financial resources since April 2012. The Charity Commission has no powers of criminal prosecution, so if it does uncover evidence of criminal offences, it passes this evidence to the police for investigation.
The collective responsibility for ensuring that a charity is properly run rests with its trustees. They all have a legal duty to ensure that the charity lawfully fulfils its purposes and does so in the best interests of its beneficiaries. A charity’s trustees should be a strong first line of defence against misconduct or mismanagement. It is important that current or former trustees co-operate fully if the Charity Commission requests information from them as part of their investigation. The commission has said that it welcomes the commitments offered by a trustee and former trustee in this case. As persons responsible for the management and administration of the charity, the trustees referred to by the hon. Gentleman cannot be regarded as whistleblowers, but the commission’s inquiry will need to understand their involvement in decision making at the time and consider whether they properly fulfilled their legal duties to the charity. The commission has confirmed that it will be speaking to Mr Molyneaux in due course.
The investigation into Island Health Trust is progressing and the inquiry remains a priority for the commission, but it needs to be considered alongside the commission’s other statutory inquiries and other functions. I am sure that the hon. Gentleman will understand that the number of statutory inquiries opened by the commission has tripled since 2015 and applications to register charities have grown by 40% over the past four years. I know that hon. Members will also appreciate that since February the commission has had to divert significant resources to dealing with the sudden increase in serious incident reports regarding safeguarding concerns. That is a significant volume of work for a small non-ministerial department with fewer than 300 staff. However, in January the Government announced an additional £5 million a year for the commission’s baseline funding from April this year in recognition of those pressures.
I am sorry that I cannot go into the specific details of this case, which are rightly a matter for the independent regulator. I do believe, however, that the commission has the necessary powers to properly investigate and take action in this case. I politely and humbly urge the hon. Gentleman to remain patient while the Charity Commission conducts its statutory inquiry. Once again, I thank him for raising this important issue and helping local residents to hold a local charity to account. I assure him that all parties are working to resolve the issue as swiftly as possible.
Question put and agreed to.